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Shareholders at Embattled Enzo Biochem Want Answers

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CorpGov
·2 min read
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By Jarrett Banks and John Jannarone

Roumell Asset Management is continuing to demand answers from biotechnology company Enzo Biochem Inc., according to a filing this week with the Securities and Exchange Commission.

The asset manager, which owns 5.8 percent of Enzo Biochem shares, asked the company to share its shareholder register so it can communicate with fellow investors about upcoming director elections at the company’s annual meeting in January.

New York-based Enzo, founded in 1976, develops, manufactures and sells advanced biotechnology solutions and platforms. Enzo, which will announce quarterly results later Wednesday, didn’t respond immediately to a request for comment from CorpGov.

Roumell said that Enzo refused to accept its nomination notice in connection to the annual meeting. Roumell also alleged that Enzo’s CEO Elazar Rabbani and director Barry Weiner received bonuses from the Paycheck Protection Program, a part of the U.S. coronavirus stimulus package passed in March that was designed to allow small businesses to keep workers on payroll.

Biggest shareholder Harbert Discovery Fund, which owns about 11.7% of Enzo shares, got two directors on the board at the last annual meeting but they both have since resigned, which left two vacancies.

Now Roumell says it is seeking two seats of its own, but the company is blowing the large shareholder off. Roumell also said that the company replaced the Harbert directors with its own picks after the nomination deadline.

“Why is it fair for the Issuer to unilaterally appoint two new directors (to replace shareholder-nominated directors) after the Purported Nomination Deadline but then not provide shareholders an opportunity to nominate candidates to replace these appointed directors?” Roumell wrote in a public filing.

On Nov. 27, Roumell delivered a letter to Enzo Biochem nominating Matthew Loar and Edward Terino for election to the company’s board at its upcoming annual shareholder meeting. The investor also seeks amendments to bylaws that would set the minimum size of the board at three directors and provide the board with discretion to adjust the size of the board from time to time.

Shares of Enzo have declined 7% in the past year, compared with the 15% rise in the Standard & Poor’s 500 Index.

Contact:

John Jannarone, Editor-in-Chief

www.CorpGov.com

Editor@CorpGov.com

Twitter: @CorpGovernor