Black's Hollinger Buyback Barred by Canuck Regulator

29 March 2005

Lord Conrad Black's plan to take private his publicly owned holding company Hollinger Incorporated [H-Inc] has again been thwarted by Canadian financial regulator, the Ontario Securities Commission.

H-Inc, which controls His Lordship's former fiefdom, the allegedly fraud-beset US newspaper group Hollinger International [H-Intl], is the vehicle via which Black runs his once-labyrinthine empire.

H-Inc is currently subject to the uncomfortable searchlight of regulatory scrutiny, which would be dimmed were its status changed from a publicly held to a privately held company.

Taking the company private has been Black's aim since last May when the OSC effectively blocked the move by banning securities trading by certain H-Inc directors and officers, citing as its reason the company's failure to file financial statements.

On Monday, the OSC upheld its earlier ruling, declaring itself "unable to form the opinion that it would not be prejudicial to the public interest to grant the requested relief". Following this decision, the board of H-Inc canceled the special meeting of its shareholders slated for Thursday.

Black and his former H-Intl henchman David Radler are currently subject to a criminal investigation by the US Attorney's Office in Chicago. They also face civil-fraud charges filed by the US Securities and Exchange Commission.

These relate to $85 million (€66.01m; £45.56m) of company funds allegedly diverted into their own pockets - a charge vigorously denied by both men who insist the payments were authorized by the H-Intl board.

Data sourced from Wall Street Journal Online; additional content by WARC staff