By: E&P Staff
Hollinger Inc., the Toronto-based holding company Conrad Black once used to control his newspaper empire, has settle a U.S. Securities and Exchange (SEC) lawsuit charging it fraudulently schemed to divert money from the parent company of the Chicago Sun-Times, the regulatory agency said Tuesday.
While Hollinger Inc. was agreed to disgorge $21.3 million in alleged improperly diverted money, no cash will change hands because Hollinger is being credited on a dollar-to-dollar basis with the $21.3 million it paid to settle the lawsuit brought against it by Sun-Times Media Group Inc. (STMG)
In November of 2004, the SEC sued Hollinger Inc. in U.S. District Court in Chicago, alleging the holding company, Black, and his former lieutenant F. David Radler from 1999 to 2003 “engaged in a fraudulent and deceptive scheme to divert cash and assets from Hollinger International Inc. through a series of related party transactions.” Hollinger International, which was also headed by Black, is the previous name for STMG.
Radler, who turned star witness against his former business partner, had previously settled with the SEC.
Hollinger Inc. did not admit or deny the allegations in agreeing to the settlement, the SEC said. A Hollinger spokesperson could not be reached.
Hollinger owns a controlling 66.8% voting stake and a 17.4% equity interest in STMG, which is undergoing a review of strategic alternatives that could include the sale of all or some of its properties.