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Hollinger Figure Defends Payments

Board Approved Them, Radler Says

By Neil Roland
Bloomberg News
Thursday, September 2, 2004; Page E04

Hollinger International Inc.'s board and the company's auditor, KPMG International, approved much of the $400 million in contested payments to Conrad M. Black and F. David Radler, Radler said.

A special Hollinger board committee said in a report released Tuesday that Black, who was chairman and chief executive, and Radler, who was president, engaged in "aggressive looting" of the Chicago-based publisher of the Chicago Sun-Times and Jerusalem Post. The two former top executives siphoned off 95 percent of the company's profit over seven years, the report said.

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The panel's report "is a highly inaccurate and defamatory diatribe written more like a novel than a serious report," Radler said in a prepared statement.

Radler, 62, is defending himself against lawsuits from shareholders and the company, and the company he helped run for much of the past decade is under Securities and Exchange Commission investigation.

Black and Radler quit as Hollinger officers in November after an internal investigation found that they paid themselves $14.4 million without the board's approval. Two days later, the company said it had received a subpoena from the SEC. Black resigned as chairman in January.

The internal report said Black and Radler got $218.4 million of the $400 million in "management fees" through entities that managed Hollinger's assets.

"The report confirms, but then disregards, the fact that the payments now in dispute were made with the knowledge and approvals of International's audit committee and board," Radler said.

He said KPMG "repeatedly reviewed and confirmed that payments now being challenged were appropriately disclosed and approved."

KPMG spokesman Thomas Fitzgerald declined to comment. KPMG is a defendant in a lawsuit filed by Hollinger shareholders, Fitzgerald said.

Radler, who was also vice chairman, said his compensation "was entirely appropriate." He said he agreed to a request from the special panel, headed by former SEC chairman Richard C. Breeden, to repay an unspecified amount.


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