Black: report accuses him of regularly siphoning company profits.
- June 19, 2018
- May 30, 2018
- May 17, 2018
Journalists on the Telegraph newspapers plan to use new revelations that former boss Conrad Black ‘looted’ hundreds of millions from the company to fuel their demand for more pay in January 2005.
Staff were told in 2001 that there was no money in the pot for pay rises – but a Hollinger investigation has found that former chief executive Black and president David Radler were able to siphon $400m, or 95 per cent of the company’s profits, over a sevenyear period.
Former Telegraph Group CEO, Dan Colson, who quit in March, is alleged to have received an unauthorised $1,073,719 bonus wired to his bank in Guernsey in 2001.
Telegraph Group NUJ father of chapel John Carey said: “This report provides the clearest evidence yet of what we have been saying for years – namely that Lord Black and his close associates have been trousering millions of pounds at the expense both of the Telegraph group as a whole and of its staff.
“The amount of money they seem to have pocketed is even more shocking than we thought. But the fact that they were doing it comes as no surprise to those of us who have been trying to draw attention to it for years.
We have been repeatedly brushed aside, now it seems we have been proved right.
“What will make Telegraph staff particularly angry is to see the detailed evidence that this was going on while we were being told repeatedly that the company was going through hard times and that consequently there was no money available for the sort of pay increases that staff could reasonably expect from a very successful company.
Obviously that is particularly true of the year when our pay was frozen but now it is clear that it applies over the whole period of Lord Black’s ownership.”
Carey said the report justifies last year’s journalists’ pay claim of eight per cent, which was settled at three per cent, and added: “We will obviously take all that has happened into account when we submit our next pay claim later this year”.
Hollinger International, which in June sold Telegraph Group to the Barclay brothers for £665 million, started its investigation into Black following pressure from other shareholders in June, 2003.
Although Black and Radler controlled the company, they only owned 18.8 per cent of Hollinger International’s equity.
The report pulls no punches and states that Hollinger was “systematically manipulated and used by its controlling shareholders for their sole benefit, and in a manner that violated every concept of fiduciary duty. Not once or twice, but on dozens of occasions Hollinger was victimised by its controlling shareholders.”
It states: “Hollinger went from being an expanding business to becoming a company whose sole preoccupation was generating current cash for the controlling shareholders.
“Behind a constant stream of bombast regarding their accomplishments as self-described ‘proprietors’, Black and Radler made it their business to line their pockets at the expense of Hollinger almost every day, in almost every way they could devise.”
The report talks of “insatiable pressure” from Black for “fee income to support the personal lifestyle Black and his wife, journalist Barbara Amiel had chosen to lead”.
The report’s allegations:
Personal expenses for the Blacks included: handbags ($2,463); opera tickets ($2,785); silverware for jet ($3,530); summer drinks ($24,950). Happy Birthday Barbara party at New York’s La Grenouille Restaurant ($42,870); refurbishing the Blacks’ Rolls Royce, $90,000.
Black took $9.5m of corporate cash in late 2000 without giving notice to Hollinger’s Board.
Black took $5.5 m of corporate cash in early 2001 by creating fictitious agreements not to compete with one of Hollinger’s whollyowned subsidiaries.
$200m was paid to Black and Radler via their company Ravelston in excessive and unjustifiable “management fees”.
Corporate jets for Black and Radler cost the company $23m between 2000-2003.
By Dominic Ponsford