(AP) Shares in Hollinger Inc. fell as much as 10% Monday, the first business day since the Toronto-based company’s independent audit committee quit.
The four directors resigned after the board rejected the committee’s proposals for changes to the board and to company management. Details of the proposed shakeup were not disclosed.
Last week the company’s subsidiary, the Chicago-based newspaper publisher Hollinger International Inc., announced a shakeup including the departure of Conrad Black as chief executive. However, Black remains chairman of Hollinger International as well as chief executive of the parent company Hollinger Inc.
An internal review at Hollinger International found that payments made to Black and other senior executives as well as to the Toronto-based parent company had not been authorized. The Securities and Exchange Commission is investigating.
On the Toronto Stock Exchange, Hollinger Inc. shares fell as much as 40 Canadian cents early Monday to 3.60 Canadian dollars, a 10% decline, in light trading. In afternoon trading, the shares were down 6%.
In a statement issued late Friday after markets closed, Hollinger Inc. said its audit committee resigned because the board rejected its recommendations for “certain management and board changes.” The committee had been looking into a $16.5 million payment made to Hollinger Inc. by Hollinger International in connection with the sale of community newspapers.
As a result of the departures, the company no longer has an audit committee made up of a majority of independent directors, as required under Canadian law. The company said it would remedy the situation as soon as possible.
Hollinger International owns The Daily Telegraph in London, the Chicago Sun-Times and The Jerusalem Post.
Hollinger Inc.’s main asset is its 72.6% voting stake and 30.3% equity interest in Hollinger International.