WASHINGTON, Nov. 17 (UPI) -- Conservative media figure Conrad Black resigned unexpectedly early Monday morning as the chief executive officer of Hollinger International Inc. after an internal investigation of the company found $32 million of unauthorized payments to Black and other executives.
A special committee was formed by the company in June 2003 to investigate certain allegations of irregularities in Hollinger's balance sheet.
In a dramatic reversal for the media leader who had built an empire of conservative-oriented publications ranging from the London Daily Telegraph and the Chicago Sun Times to the Jerusalem Post, the company is now considering putting itself up for sale. According to a report in the Times of London, possible buyers include the Washington Post and British media company Daily Mail and General Trust.
The company has retained investment banking firm Lazard LLC to examine the potential sale of Hollinger's assets.
"Now is the appropriate time to explore strategic opportunities to maximize value for all shareholders of Hollinger International. We are delighted that Bruce Wasserstein and his team at Lazard will be working with us to ensure the market is well aware of the substantial value of the company's assets," said Black in a statement. "Reflecting my full support of this process, I will be devoting my attention in coming months to achieving a successful outcome for all Hollinger shareholders.
He added: "The present structure of the group clearly must be renovated. As the strategic process proceeds we will continue to cooperate entirely with the special committee to resolve corporate governance concerns."
In a statement released Monday, the company said Black will remain as a non-executive chairman of both Hollinger and the Telegraph Group. There has been conjecture in the financial community and among the press whether this arrangement will last long.
Through the years, Black has been known as an abrasive figure, making enemies both outside and inside the company he founded.
According to the company, member of the board Gordon A. Paris has been elected interim president and CEO of Hollinger. Paris is a managing director of the New York-based investment banking firm of Berenson & Company, where he heads its media, telecommunications and restructuring practices. The company said that Paris will serve as Hollinger's CEO while staying with his current position at Berenson.
"This is a pivotal moment in Hollinger's history, and I welcome the opportunity to work with all the employees of Hollinger and its board to ensure a smooth transition. The company has magnificent assets, and a superb group of employees who have created tremendous vitality and quality in our publications," Paris said.
According to the company's release, also resigning is David Radler, Hollinger's president and chief operating officer and Mark Kipnis, company vice president and corporate counsel. Radler also resigned as the publisher of the Chicago Sun-Times.
The resignation of Black and close executive comes following an announcement from the company that a special board committee had uncovered $32.15 million in payments which "were made that were not authorized or approved by either the audit committee or the full board of directors of Hollinger," the company said.
According to the company, around $7.2 million was paid to both Black and Radler in 2000 and 2001, and $16.6 million was paid to Hollinger as part of an elaborate accounting procedure of "non-competition payments" related to the sale by Hollinger of Canadian paper the National Post to CanWest Global Communications of Winnepeg three years ago.
Black along with Radler and Atkins will repay the unauthorized payments with interest by next June, along with parent company Hollinger also making repayment.
Conrad has particularly been a controversial figure in his home country of Canada, where his conservative views, often voiced through his media properties, clashed with more liberal viewpoints. He renounced his Canadian citizenship in 2000 after liberal Canadian Prime Minister Jean Chretien -- an avowed foe -- blocked a British proposal of peerage for Black.
Black's National Post had been a fierce and longtime critic of Chretien.
Now Lord Black in the UK, Conrad Black is facing strong shareholder antipathy in light of unauthorized payments uncovered by the company's board of directors.
Hollinger shares were up nearly 16 percent Monday on news of Black's resignation.
