Hollinger Report Blasts Black, Radler

By: (AP) Hollinger International Inc. was "systematically manipulated" by its controlling shareholders who took millions in payments that should have gone to the company, according to a report filed Tuesday with the Securities and Exchange Commission.

"Not once or twice, but on dozens of occasions Hollinger was victimized by its controlling shareholders as they transferred to themselves and their affiliates more than $400 million in the last seven years," according to the report commissioned by a special board committee of the Chicago-based newspaper publisher.

Hollinger International, which owns the Chicago Sun-Times, Jerusalem Post and other major newspapers, also filed the report late Monday in U.S. District Court in Chicago, where the company is based.

The 400-page report said the business judgment of senior officials, including media baron Conrad Black and former Sun-Times Publisher David Radler, was clouded by a preoccupation with compensation for executives.

"Hollinger went from being an expanding business to becoming a company whose sole preoccupation was generating current cash for the controlling shareholders, with no concern for building future enterprise value or wealth for all shareholders," the committee found. "Behind a constant stream of bombast regarding their accomplishments as self-described proprietors, Black and Radler made it their business to line their pockets at the expense of Hollinger almost every day, in almost every way they could devise."

Black spokesman Jim Badenhausen did not immediately return a telephone call Tuesday morning from The Associated Press.

Meanwhile, the SEC's Midwest regional office planned to recommend civil charges be filed against Hollinger Inc., which is controlled by Black, for alleged violations of the Securities Exchange Act, the company disclosed Monday.

Black was forced out as CEO and chairman of Hollinger International after an internal investigation found that he and several associates improperly received millions in payments that should have gone to the company. Black retains voting control of publicly-traded Hollinger International through Hollinger Inc.

In a statement, Toronto-based Hollinger Inc. did not name the alleged violations but said it plans to formally tell the SEC why it believes the charges should not be brought.