Newspaper publisher Hollinger International Inc said late on Saturday it was ousting media tycoon Conrad Black as its chairman and suing him and one of his top deputies for more than US$200 million.
The move by Hollinger International, which owns the Chicago Sun-Times and Britain's Daily Telegraph among other newspapers, follows the resignation of its high-profile chief executive officer (CEO) in November after the company disclosed he and several associates received millions of dollars in unauthorized payments.
The company is being investigated by US regulators, and has said it is exploring a possible sale.
The lawsuit filed by a special committee of the company's independent board members charged that Black and Hollinger Inc -- a Toronto-based holding company through which he controls Hollinger International -- together with former president and chief operating officer David Radler, collected unjustified and excessive management fees and altered company books and records to conceal their actions.
A lawyer for Black, John Warden, said in a statement that lawsuit was an attempt by the special committee to draw attention away from new evidence that contradicts earlier statements by independent board members concerning certain payments to Black.
"We believe this lawsuit is an attempt by the special committee now to divert attention from the fallacy of their earlier claims," Warden said.
Black, the company's controlling shareholder, remains a board member and a member of the executive committee, a company spokeswoman said.
His wife, Barbara Amiel Black, is also a board member, along with well-known figures such as former US secretary of state Henry Kissinger and Pentagon adviser Richard Perle.
Hollinger International said in a statement that by action of the executive committee of its board, Black "has been removed as nonexecutive chairman of the company, effective immediately."
Black, a member of Britain's House of Lords, stepped down as CEO after the company charged that he, Radler and several other executives had received US$32.2 million in payments not authorized by the board of directors.
In its lawsuit Hollinger said that "charges that the defendants di-verted and usurped corporate assets and opportunities from the company through systematic breaches of fiduciary duties owed to the company and its noncontrolled public shareholders."
The suit, filed in US District Court in Manhattan, accuses Black and the other defendants of "altering the company's books and records" and of "misrepresenting or omitting to provide material information in statements to the company's independent directors or to public shareholders."
The company's moves follow months of complaints by shareholders who say Black and his associates received excessive pay.
A lawsuit by a large investor, hedge fund Cardinal Value Equity Partners, has charged that Hollinger executives, including Black, treated the company "like their private piggy bank."
Under an agreement reached with the company when he resigned as CEO, Black faces a Sunday deadline to start paying back US$850,000 of the roughly US$7 million in payments the company deemed unauthorized in November.
The US Securities and Exchange Commission on Friday obtained a federal court order against Hollinger International, to protect efforts by the special committee to recover some of the unauthorized payments to Black even if the company were sold.
The SEC also filed a civil complaint against Hollinger alleging that it failed to disclose the controversial payments to former insiders from at least 1999 to 2001. Hollinger said it was cooperating with the SEC.
Meanwhile, several British newspapers reported in their editions yesterday that billionaires David and Frederick Barclay, who own the Ritz Hotel and The Scotsman newspaper, had approached Black about buying control of Hollinger's Telegraph newspapers.
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