EMBATTLED Press baron Lord Black is facing mounting pressure from members of Hollinger International’s star-studded board to resign as chairman.
Black quit as chief executive of the US newspaper group in November after an internal probe revealed that he and other executives had received more than $30 million (16.5 million) in unauthorised payments.
The alleged financial irregularities prompted an investigation by the US Securities and Exchange Commission (SEC), which called on Black to testify on the affair last month. Black, on the advice of his legal team, attended but refused to speak.
That refusal has reportedly fuelled intense dissatisfaction among some members of the board at Hollinger International, whose titles include the Daily Telegraph, Sunday Telegraph and the Chicago Sun- Times.
This week the New York Post reported, citing unnamed company sources, that Black faced mounting pressure to step down as chairman as the two sides negotiated a revised timetable for the repayment of the funds.
Wire-service-reports have also suggested that Black is coming under fire from some of his fellow Hollinger International directors, a line-up that includes US political heavyweights Henry Kissinger and Richard Perle. The board has yet to debate formally Black’s continued tenure as chairman. A meeting scheduled for last weekend was postponed as Black was given extra time to repay his share of the unauthorised funds. Black, who has vowed to retain his chairmanship of the company, would remain as a board director even if he were forced to resign his more senior position.
Black remains Hollinger International’s top shareholder. He is also chief executive of Hollinger Inc, Hollinger International’s parent company in Toronto which controls close to three-quarters of the subsidiary’s voting stock.
Hollinger International’s troubles are compounded by a separate legal action by a minority shareholder, hedge fund Cardinal Value Equity Partners.
Cardinal’s legal broadside alleges that Hollinger International’s independent directors failed to exercise adequate control of the company’s finances, including the unauthorised payments to Black and others.
“While the Hollinger executives were treating Hollinger like their private piggy bank, Hollinger’s board, including ostensibly blueribbon independent directors and Hollinger audit committee, were totally quiescent,” the lawsuit claimed. It named among others as defendants Kissinger and Perle, Black’s wife Barbara Amiel Black, and former Illinois Governor James Thompson.
