By: (AP) Hollinger Inc., the scandal-plagued parent of newspaper publisher Hollinger International Inc., Tuesday said it increased the number of independent directors on its board to five from three.
The two new independents are Robert J. Metcalfe and Allan Wakefield.
Metcalfe is general counsel of Spotnik Mobile Inc., a Canadian high-speed wireless Internet company that is a subsidiary of Telus Corp., and is counsel to the law firm of Metcalfe, Blainey & Burns, LLP.
Wakefield operates a consulting firm specializing in financial and operations advice for startup companies. He also has held senior executive positions with companies including Inxight Software Inc., Kestrel Solutions Inc., Spar Aerospace Ltd., and Alcan Aluminum Ltd.
The appointments come amid allegations that Toronto-based Hollinger Inc. improperly paid $863,000 in June to Ravelston Corp., a holding company controlled by Conrad Black, David Radler, and other company directors, according to a court filing.
Hollinger's Hollinger International Inc. unit is a Chicago publishing concern formerly headed by Black and Radler.
They are immersed in a legal battle with Hollinger International, which alleged in a recent board-committee investigation that Black and Radler improperly diverted hundreds of millions of dollars of the company's money to themselves over seven years. They have denied any wrongdoing.
Catalyst Fund General Partner I Inc., an investor in Hollinger Inc., alleged in a filing in Ontario Superior Court of Justice that Hollinger Inc. paid $864,930 to Ravelston around June 30 without approval from the company's independent directors, in violation of governance procedures meant to ensure related-party transactions are reviewed by the independent directors.
The independent directors earlier this month refused to retroactively approve the transaction, and the directors have not repaid the funds, the filing alleges.
Four directors, including Black and Radler, have refused a call by the independent directors for them to resign, the filing says.
Black controls Hollinger International through his control of Hollinger Inc.
Spokesmen for Lord Black and Mr. Radler had no comment on the court filing, The Wall Street Journal reported.
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