Skip to comments.Jerusalem Post Owners Resign; Face Corruption Charges
Posted on 11/17/2003 11:06:43 PM PST by IsraelBeach
JERUSALEM POST OWNERS RESIGN; FACE CORRUPTION CHARGES Post To Be Sold, Management Reshuffled
Jerusalem Post Publisher Tom Rose, Editor Bret Stephens To Be Replaced
By SETH SUTEL, AP Business Writer
New York-----November 17........ Under heavy pressure from investors, Conrad Black will step down as chief executive of Hollinger International Inc., publisher of the Jerusalem Post and Chicago Sun-Times, and the company may be sold after an internal investigation found that fees had been improperly paid to Black and other senior executives.
Several other executives are also leaving Hollinger as part of a management shakeup the company announced early Monday. David Radler resigned as the company's president and as publisher of the Sun-Times, and Mark Kipnis resigned as general counsel.
Black will officially retire as of Friday and remain non-executive chairman of Hollinger to oversee a sale or other initiatives. He will also continue as chairman of The Telegraph Group Ltd., a wholly owned Hollinger subsidiary, and as head of Hollinger Inc., the Toronto-based parent company of Hollinger International.
Hollinger said it has retained the investment bank Lazard LLC to explore a sale of the company or one or more of its newspapers. In addition to the Sun-Times, the company publishes The Daily Telegraph in London and The Jerusalem Post.
Board member James Thompson, a former Illinois governor, said Lazard will explore whether Hollinger should "sell its assets, recapitalize, sell the whole company or stay as we are." He said no decision is likely for several months.
Hollinger acknowledged that an ongoing internal review revealed that Hollinger's parent company, Black, Radler and two other executives received a total of $32.15 million in unauthorized payments in connection with the sale of several community newspapers.
All of the executives except one have agreed to repay Hollinger what they owe, with interest, the company said. The fourth, executive vice president J.A. Boultbee, was fired, Hollinger said.
According to the company, Black and Radler each received about $7.2 million in unauthorized payments; executive vice presidents Peter Y. Atkinson and Boultbee each received about $600,000. The executives could not be reached for comment.
The company said Black also has agreed to seek the repayment of $16.55 million paid to Hollinger Inc., where he is the majority shareholder.
Black's office in Toronto referred calls to vice chairman Daniel W. Colson, who did not return a call seeking further comment. In a statement, Black said that "the present structure of the group clearly must be renovated." Black said he would cooperate with Hollinger's investigative committee to "resolve corporate governance concerns."
Black has been under pressure from investors for months over the fees, which were described as "non-competition" payments made as part of the sale of several newspapers in the United States and Canada.
Black has defended the fees, which are intended to ensure that a seller will not re-enter the markets of the properties he is selling. But shareholders have questioned why the payments went directly to the executives rather than the company.
Black, who renounced his Canadian citizenship and now holds the title Lord Black of Crossharbour in England, clashed with angry shareholders at the company's annual meeting in May as they criticized Hollinger's management and executive pay.
"Like all fads, corporate governance has its zealots, and its tendency to excess," Black said at the time.
Investors welcomed news of the shakeup, pushing Hollinger International's shares up $2.23 to $15.73 in unusually heavy volume on the New York Stock Exchange.
Last Friday, Hollinger informed the Securities and Exchange Commission that it could not file its quarterly report on time because it was investigating questions raised by shareholders.
In its statement, Hollinger said that a pair of committees had found that some of the payments had been unauthorized and that the company's public disclosures about them had been "incomplete or inaccurate in some respects."
Gordon A. Paris has been named interim president and CEO of Hollinger, with his election as CEO to take effect Friday. Paris is currently a director of Hollinger. The vice chairman Colson will take on the additional job of chief operating officer.
Hollinger also owns The Spectator magazine in Britain and a large number of community newspapers in the Chicago area.
Sun-Times executives met with staff members Monday afternoon and assured them the newspaper is not in danger of folding, according to people who attended the meeting and spoke to the AP on condition of anonymity. A new publisher is expected to be named this week.
Southeastern Asset Management Inc., a major shareholder of Hollinger, declined to comment on the changes, and a call to Tweedy, Browne Co., a shareholder which had pressed for changes, was not returned.
FRmail me to be added or removed from this pro-Israel ping list.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.