Unauthorized payments to the media tycoon Lord Black and former directors of Hollinger International have caused the owner of the Chicago Sun Times, the Jerusalem Post and the London Daily and Sunday Telegraph newspapers, to overstate its earnings by US$17 million.
In a delayed filing to American regulator the securities and exchange commission, Hollinger was also forced to admit its third-quarter report was "deficient" because it had not been reviewed by independent accountants or signed off by the chief executive and finance director.
Lord Black brought forward his resignation as chief executive by two days to avoid signing off the accounts; Gordon Paris, the new chief executive, has had insufficient time to give his personal certification, as required under the new Sarbanes-Oxley rules introduced after the collapse of Enron.
The 50-page filing reveals an independent review of Hollinger's affairs led by former SEC chairman Richard Breeden, which discovered the unauthorized payments, had cost US$3.4 million in the period up to the end of September and would "exceed" US$8 million in the current financial year.
The quarterly report, which was expected a week ago, admits that before November 17 public statements by Hollinger may have been "incomplete or inaccurate" because of the recently uncovered US$32.15 million of payments to Lord Black and former directors.
While they have promised to repay the fees, the company warned there can be "no assurance" that it would retrieve the amounts.
The company explained that the discovery of the payments -- largely the result of "non-compete" clauses -- had led it to calculate that it had understated its tax provision by US$17 million. But warned that "this estimate is subject to change based on further analysis."
The regulatory filing also disclosed that Hollinger made a US$2.5 million investment in Trireme, a venture capital firm with links to Hollinger directors Lord Black, Henry Kissinger and Richard Perle.
The company reported a net loss in the third quarter of US$7 million, down from US$32 million in the same period a year ago.
Although Canadian-born Lord Black has resigned as chief executive of Hollinger, he is remaining as chairman in order to oversee a "strategic process" on which investment bankers Lazards are advising the company.
The bankers are known to have received offers from rival publishing companies for Hollinger newspapers.
Lord Black, who has issued strongly worded defenses of his position, is now reported to have hired high profile lawyer David Boies to advise him.
Boies, who has represented US presidential candidate Al Gore in the Florida election case and former Enron finance director Andrew Fastow, is reported to have advised Lord Black to tone down his public comments.
In the regulatory filing, Hollinger promised to cooperate with an SEC investigation into the unauthorized payments. The SEC has asked for documents from Hollinger, its audit committee and KPMG, which was unable to sign off the accounts because of the continuing investigation by the special committee led by Breeden.
The filing also confirmed that the structure of the company was altering so that a management relationship with a unit of Ravelston, which is controlled by Lord Black, would no longer have fees payable to it.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS