Telegraph Fires Black; Tweedy Demands Colson's head

09 March 2004

Et tu Brute!

Lord Conrad Black of Crossharbour was ousted Monday as chairman and director by Britain's Telegraph Group -- the jewel in the peer's publishing crown.

The sacking of Black occurred even though he still controls the company -- theoretically at least -- through Hollinger Incorporated [H-Inc], the Canadian investment vehicle in which his 26% stake confers a 73% voting interest in the Telegraph's parent, Hollinger International [H-Intl].

Last month Judge Leo Strine, Vice Chancellor of the Delaware Court of Chancery, blocked Black from selling those shares to Britain's Barclay twins -- who have since declared their intention to join the bidding auction for the Telegraph Group alone.

Meantime, Black's closest lieutenant, Dan Colson, chief executive of the Telegraph Group and chief operating officer of H-Intl, has attracted the ire of the latter's investors.

It transpired from last month's court case that Colson had played a key but covert role in sealing Black's deal with the Barclays -- despite the fact that it was strongly opposed by the H-Intl board.

The news prompted New York firm Tweedy Browne, Hollinger's largest institutional investor and Black's nemesis in the unravelling of the Hollinger scandal, to email a senior Hollinger executive questioning why Colson is still employed at the company.

"I am completely perplexed as to why an executive and director that shows that degree of duplicity draws a salary at a public company," railed the message.

Colson declined to comment on the matter; H-Intl likewise; but 'a person close to Hollinger' said internal and board-level discussions about Colson's continued role were "ongoing".

Data sourced from: Financial Times and BBC Online Business News (UK); additional content by WARC staff