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Hollinger International: The Lord Blac K Saga
Hollinger International: The Lord Blac K Saga
Hollinger International: The Lord Blac K Saga
k Saga
Hollinger Inc.
Ravelston
HII
Israel
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HII Went Public
• 1994
• Black Controlled majority of Voting Rights & Influe
nced the Decisions
• Black wished to be Inducted into the Lords in Engla
nd
• Left his Canadian citizenship
• In 2001 formally inducted as Lord Black of Crossha
rbour
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SEC Compliant Against HII :
Disclosure of Information-1999-2001
HII tampered with the books to misrepresent transfers as no
n compete payments.
No suitable internal control to avoid misappropriation of fu
nds
Amount transferred to Hollinger as non compete fees were
not disclosed.
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Allegations Against Black
Management Fees
Personal Extravagance
Infrastructure
Operational Audit
Reward System
Internal Audit
Controls
Information system audit
Management Audit
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Flashback
• High management fees
• RMI using HII’s funds
• Non-compete payment bei
ng made by HII to black.
• No difference between ma
nagement and company.
14
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Corporate Stance
15
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Corporate Governance
Corporate governance is the set of processes,
customs, policies, laws, and institutions affecting t
he way a corporation (or company) is directed, ad
ministered or controlled.
16
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Corporate Governance Framework
17
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Corporate Governance At Hollinger International
18
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Recommendations
• Audit performance of board.
• Schedule regular meeting of Non-executives.
• Disclosure on corporate websites and annual rep
orts
• Lead by example
• Young Blood
• Explain fully how discretion has been exercised
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Thank You!