US watchdog involved in Hollinger scandal

US financial watchdog the Securities and Exchange Commission (SEC) has served subpoenas on Hollinger International, which publishes the Daily Telegraph.

Shareholders in Hollinger had been calling for an official SEC investigation since May, when it

emerged that chief executive Conrad Black and several Hollinger executives had received

nearly $300m (€251.75) in management fees and non-compete payments from rival publishers since 1995.

The SEC acted when Hollinger admitted on Friday that a further $32m (€26.85) in non-compete payments had been passed to Lord Black and his associates and had been kept secret from investors.

Hollinger's auditor KPMG is expected to be questioned by the SEC about the payments and how they slipped through the net.

KPMG yesterday defended its work for the company and said it had acted appropriately.

Lord Black has promised to pay back the $7m (€5.88m) he received from the unauthorised payments, but the scandal lost him his job and he stepped down two days early , on legal advice.