A committee investigating alleged financial wrongdoing by newspaper baron Conrad Black has been unable to account for dividend payments from a newspaper in the Cayman Islands to a Toronto-based holding company controlled by Black, The Post has learned.
The development suggests the probe is extending beyond financial deals between Black and Hollinger International – the company that operates Black’s newspapers – to detail a pattern of alleged financial misdeeds by Black, sources say.
Hollinger Inc., the Toronto-based holding company controlled by Black, has owned a 40 percent stake in the Cayman Free Press since 1988, and the company’s share of the dividends amounts to roughly $100,000 a year, according to sources familiar with the matter.
A spokesman for Black said: “Lord Black is confident that there’s nothing unusual with Hollinger Inc.’s dealings with the Cayman Free Press. But in any event, this is a Hollinger Inc. matter and extends beyond the scope of Hollinger International’s special committee review.”
The committee, headed by former Securities and Exchange Commissioner Richard Breeden, was formed last year and has focused on allegedly improper payments made by Hollinger International to Black and other executives.
The committee has found that payments that were supposed to go to Hollinger Inc. cannot be accounted for, and is investigating whether the money went straight into the pockets of Black and other execs, sources say.
Hollinger International is listed on the New York Stock Exchange. Hollinger Inc., while controlled by Black, is listed on the Toronto Stock Exchange. Black and other Hollinger Inc. execs own 65 percent of Ravelston, a private Canadian corporation, which in turn owns more than 80 percent of the equity in Hollinger Inc.
The Cayman Free Press, which publishes “The Caymanian Compass,” a daily newspaper, is listed as a Hollinger International media property on the company’s Web site but is actually owned by Hollinger Inc.
In a recent Hollinger Inc. regulatory filing, the company said the stake in the Cayman Free Press does not “contribute materially to our revenue or earnings.”
Black and his top deputy, David Radler, were forced to resign in November after Hollinger International’s board of directors found some $32 million in so-called “non-compete” payments that were either not authorized or improperly disclosed. Black remains chairman of Hollinger International.