Court's Inspector to Report on Hollinger Execs by Nov. 13

By: E&P Staff An Ontario justice Thursday appointed the forensic accounting firm Kroll Lindquist Avey Inc. to conduct an investigation into transactions between Hollinger Inc. and several of its top executives and directors, including Chairman and CEO Conrad Black.

Kroll will deliver a preliminary report on its findings by Nov. 13, under the order signed by Justice Colin L. Campbell of the Ontario Superior Court of Justice.

The appointment had been sought by Catalyst Fund General Partner I, a minority Hollinger shareholder that alleges several deals between the company and its insiders were improper.

Catalyst has also asked the court to remove all Hollinger directors except Robert J. Metcalfe and Allan Wakefield, who were appointed two weeks ago. That motion was adjourned until Oct. 29. In a statement, Hollinger said it "and certain of its directors have undertaken that they will not enter into any related party transactions ... without two business days' advance notice to Catalyst."

Kroll will investigate any transactions between Hollinger and Black; his wife and fellow director Barbara Amiel Black; director and Deputy Chairman F. David Radler, the former Chicago Sun-Times publisher; director and CFO Peter F. White; director and Executive Vice President Jack Boultbee; and two long-time business associates of Black, Daniel Colson and Peter Atkinson.

Under the order, however, Kroll will not investigate transactions involving Hollinger International, the publicly traded publisher of the Sun-Times and other papers. The order was signed the same day Hollinger International announced it intends to refile a lawsuit accusing its former CEO Black and others of "looting" some $400 million through allegedly improper payments and fees. Black owns an 18% equity stake and 68% voting share of Hollinger International.