By: E&P Staff Kroll Lindquist Avey Inc. -- the forensic accounting firm appointed last week by an Ontario court to investigate insider deals at Hollinger Inc. -- quit on Monday, Hollinger said.
In its statement, Hollinger said the firm had "informed Hollinger today that it must withdraw from its appointment as inspector." Hollinger gave no reason for the resignation. When the appointment was announced last Thursday, a Hollinger statement had said Kroll would not begin its work "until certain potential conflicts-of-interest issues involving Kroll are resolved."
Hollinger said a new inspector would be appointed by the court.
Kroll was originally appointed on a motion by Catalyst Fund General Partner I, a minority Hollinger shareholder that alleges several deals between the company and insiders were improper. Catalyst is seeking the ouster of Chairman and CEO Conrad Black, all but two of Hollinger's directors and two other Black associates.
Kroll was to have issued a preliminary report by Nov. 13. The investigation of the court-appointed inspector will not include allegations of self-dealing at Hollinger International, the publicly traded company controlled by Hollinger Inc. that publishes the Chicago Sun-Times and other papers.
The announcement of the Kroll resignation came in Hollinger's bi-weekly "status update." That was basically all the news in the update. Hollinger again said it could not file its own financial statements until Hollinger International does, which it said it had been told would happen "within the next several weeks." Hollinger said it had about $14.7 million cash on hand as of Oct. 15.
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