Black Puce at Canadian Probe Into Fraud Allegations

23 March 2005

Lord Conrad Black of Crossharbour is to suffer the indignity of yet another investigation into allegations of fraud and looting during his tenure as chief executive of US newspaper group Hollinger International [H-Intl] - in which his privately-held company, Ravelston Management, is the largest shareholder.

These charges were investigated last year by the US Securities and Exchange Commission which has since launched a civil lawsuit related to non-compete and management fees paid by Hollinger to Ravelston.

The latest probe, launched earlier this month by the Ontario Securities Commission, has inspired His Lordship to anger as it could imperil the timetable for Ravelston to take Hollinger Incorporated [H-Inc] private.

H-Inc is the vehicle through which Black controls H-Intl and the buyout plan is due to be presented to the company's minority shareholders at the end of March. "It would be unjust if the OSC yielded to any attempt by [the SEC] to influence it," complained Ravelston.

Continued the statement: "The OSC should act in the best interests of [H-Inc] shareholders by providing them with an opportunity to vote on that transaction.

"In any event, the allegations in the OSC notice of hearing will be vigorously opposed, and the respondents are confident of demonstrating that these allegations are unfounded."


NEWS FLASH Wed 25-Mar-05, 0816 GMT
Black, Radler Under Criminal Investigation

It emerged Tuesday that the US attorney's office for the Northern District of Illinois is conducting a criminal investigation into payments made to former Hollinger International [H-Intl] executives Conrad Black and David Radler.

A court filing revealed that investigators are seeking to keep confidential a document related to the Securities and Exchange Commission's civil case against the two men.

Last November the SEC filed civil fraud charges against Black and Radler, alleging illicit diversion into their own pockets of at least $85 million in company funds. Both men deny the charges.

Data sourced from Financial Times Online; additional content by WARC staff