In an astonishing and unprecedented admission, Hollinger International revealed in its annual report that most of its assets had been pledged to lenders as collateral – and that the interests of its chairman and controlling shareholder Lord Conrad Black may be in conflict with those of the group’s other investors

The usual cosmetic numbers were dished out earlier this week [WAMN:03-Apr -03] announcing the US-headquartered group – which owns such papers as Britain’s Daily Telegraph, the Jerusalem Post and the Chicago Sun-Times – posted pre-tax losses for 2002 of $128 million (€118m; £82m), down from $357m the year before, despite a 12.2% fall in revenues to just over $1 billion.

But only London-based newspaper The Guardian bothered to dig further. It uncovered a report filed with the US Securities and Exchange Commission revealing that “the majority of shares in [Hollinger] subsidiaries have been assigned to lenders as collateral”.

The SEC filing continues: “Our subsidiaries and affiliated companies are under no obligation to pay dividends and, in the case of [Hollinger subsidiary] Publishing and its principal domestic and foreign subsidiaries, are subject to statutory restrictions and restrictions in debt agreements that limit their ability to pay dividends. Substantially all of the shares of our non-Canadian subsidiaries have been pledged to lenders of the company” [WAMN’s italics].

And there is a sting in the tail with this astonishing admission to Hollinger shareholders: “Lord Black is our controlling shareholder and there may be a conflict between his interests and your interests.”

The report also concedes that certain deals between the group and Black’s personal and family interests may be less favourable to Hollinger shareholders than agreements with independent companies.

Black, a Canadian citizen, ennobled for his services to industry [ie donations to a UK political party], owns 72.8% of voting shares in the company via a complex vehicle, Ravelston Corporation, a subsidiary of which (Ravelston Management) provided ‘consultation and administrative services’ to Hollinger and in 2002 invoiced $23.7m for its services.

Another Hollinger ‘supplier’ is Black-Amiel Management, a company bearing the names of the Hollinger boss and his wife Barbara Amiel, a Daily Telegraph columnist. Amiel is also a director on the Hollinger board and vice-president of editorial. During 2002, Hollinger paid Ravelston executives remuneration of just under $2m.

This, however, is likely to be petty cash. Details of the Black family’s total pay (as footed by Hollinger stockholders) are not available.

Data sourced from:; additional content by WARC staff