Hollinger director quits after four days

Hollinger Inc., the Toronto-based holding company controlled by newspaper baron Lord Black of Crossharbour, announced that one of its independent directors has stepped down just four days after being named to the post.

The sudden departure of Andre Bisson, a former chancellor of the University of Montreal, was the latest sign of disarray in Lord Black’s media empire, which includes The Daily Telegraph, The Chicago Sun-Times and The Jerusalem Post.

On Sunday, Lord Black agreed to sell his controlling interest in Hollinger Inc. to David and Frederick Barclay, a pair of reclusive twin brothers who oversee their holdings in British media and retailing from a small island in the English Channel. Hollinger Inc., in turn, controls Hollinger International Inc., the actual owner of the newspapers.

The deal, which is subject to approval by Canadian regulators, followed weeks of wrangling between Lord Black and a special committee at Hollinger International formed at the request of dissident shareholders, who say Lord Black improperly diverted millions in fees to himself and senior associates.

Hollinger Inc. said in a short statement yesterday that Mr Bisson was departing because of a conflict, which the company did not name. Hollinger Inc. officials did not return calls for comment, and calls made to Mr Bisson’s office were also not returned.

Hollinger Inc. had announced on Friday that it was appointing Mr Bisson an outside director along with Richard Rohmer, an author and former pilot in the Canadian military. In November, all four of the company’s independent directors resigned en masse after the full board rejected their proposals to revamp the company.

Also yesterday, Hollinger International said it had named Gordon Paris, the interim CEO, as interim chairman of the board. The company removed Lord Black as chairman on Saturday and said it was suing him and others to recover $200m (€159m) that the company says he took in inflated management fees and other payments.

Lord Black has called the suit “spurious” and says he does not recognise the board’s decision to oust him as chairman. He has also refused to return $7.2 (€5.7m) in fees that he had previously agreed to repay, saying new evidence had emerged that the payments were in fact authorised, contrary to previous findings by the special committee.

Lord Black also asked a Toronto court on Monday for an injunction to prevent Hollinger International and some of its directors from interfering in the deal with the Barclays. His deal with the Barclays, should it go through, could complicate Hollinger International’s efforts to recoup money from him. The company is still considering how to respond, and yesterday assembled a new committee of its board to review the offer and its implications.

Lord Black stepped down as CEO of Hollinger International under pressure in November as part of a management shake-up, but he remained the company’s controlling shareholder through his control of Hollinger Inc.

On Friday, a federal judge in Chicago issued an order at the US Securities and Exchange Commission’s request barring interference into Hollinger International’s internal investigation of the improper payments. The SEC said in its lawsuit that there had been efforts by corporate insiders to “to thwart and obstruct the efforts” of the review.

Hollinger International’s board includes several prominent public figures, including Henry Kissinger, defence adviser Richard Perle and former Illinois Governor James Thompson.