Publishing giant ousts chairman Black
US newspaper publisher Hollinger International has removed Conrad Black as its chairman.
It follows the announcement of a lawsuit claiming he and an associate improperly took more than $226m (€181m) from the company.
Hollinger, publisher of newspapers including the Daily Telegraph and the Chicago Sun-Times, said the executive committee of its board of directors had removed the former Daily Telegraph boss as chairman, with immediate effect. He remains the company's controlling shareholder.
The lawsuit, which was filed in federal court in New York, accuses Black and David Radler, the company's former president and chief operating officer, of "repeated and systematic schemes to divert corporate assets and opportunities to themselves".
Hollinger International is seeking recovery of the money, which includes fees paid to both men as part of asset sales. It also wants fees paid to Hollinger's Toronto-based parent company Hollinger Inc, as well as two privately held companies controlled by Black.
The lawsuit accuses Black and Radler of altering the company's books to provide a pretext for the payments or to conceal their actions. It also accused them of lying in public and failing to disclose important information to shareholders and the company's independent directors.
Black is at loggerheads with the company over $7.2m (€5.7m) in fees that he agreed to repay under a deal reached in November. Black failed to pay a first instalment of the repayment at the end of last year, and now has until today to do so.
However, a lawyer for Black has said that newly-revealed information made it uncertain that Black still had to repay the money. John Warden, said in a statement that Black has shown the special committee evidence contradicting its earlier statements that the payments to Black had not been authorised.
Warden called the lawsuit an attempt "to divert attention from the fallacy of their earlier claims" as well as an effort to hinder Black from making a transaction that would provide needed money to its parent company.
The lawsuit was based on information uncovered by a special committee formed in June to investigate shareholder concerns, principally over the "non-compete" payments made to executives as well as management fees to entities controlled by Black.
