Hollinger successor takes stand at Black fraud trial

A businessman who steered Conrad Black's Hollinger newspaper empire through a storm of lawsuits and investigations has told a court that the former media mogul "was very knowledgeable" about the finances of the company he is accused of swindling out of £44 million.

Investment banker Gordon Paris, who took over Hollinger International from former Daily Telegraph boss Black in 2003, was first to take the stand at the trial in Chicago of the peer and three other ex-Hollinger executives.

Black, 62, built Hollinger from a single paper into an international conglomerate that owned the Chicago Sun-Times, the Toronto-based National Post, the Jerusalem Post and the Daily Telegraph, as well as hundreds of community papers across North America.

"Based on my experience, Mr Black was very knowledgeable" about Hollinger financial operations, Paris said.

Prosecutors hope his testimony will undercut a defence claim that Black left many financial details to top aide David Radler, now the US government's star witness.

Black is accused of selling off hundreds of community newspapers and pocketing fees from the buyers in return for agreements to not compete with the new owners in markets where the papers circulated.

US prosecutors say the fees should have gone to Hollinger's shareholders and not into the pockets of Black and two other Canadian executives, John Boultbee and Peter Atkinson. Chicago lawyer Mark Kipnis is charged with arranging the fees but not receiving them himself.

The Sun-Times is the only remaining large paper. The rest have been sold, and the name of the company has changed to Sun-Times Media Group.

On Tuesday, Black defence lawyer Edward Genson told jurors that Black had largely left Hollinger business in western Canada and the US to Radler while concentrating on eastern Canada and London.

Prosecutors say the defendants lied to both the Hollinger International board of directors and outside auditors about the so-called non-compete payments. But Genson said Black negotiated only one of the deals, a massive 2,000 sale of newspapers to Can West Global Communications, and that the board and auditors were kept fully informed.

Paris told the jury Black was able to control the newspaper conglomerate through a small, Toronto-based holding company, Ravelston, of which he is the majority shareholder. That company, in turn, owned a publicly-traded Canadian holding company, Hollinger Inc, which held a 35 per cent stake in Hollinger International.

Despite its minority share in the company, which was traded on the New York Stock Exchange, Hollinger Inc was able to wield control over the big newspaper corporation because it owned a superior class of stock.

Jurors have not been told that Ravelston, which is in receivership, recently pleaded guilty to charges in the case over Black's objections.

Paris was brought into the company in 2003 as a member of the board of directors after serving as one of its bankers. He said Black called him and asked if he would be willing to conduct an investigation of fees received by members of the Hollinger management because shareholders were starting to demand information concerning the payments.

He became the head of a special committee whose investigation led to shareholder suits against Hollinger, the criminal investigation and Black's ousting as president and chief executive in late 2003 and then as chairman.

Paris ended up running the company. He relinquished the job of president and chief executive last December.

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