Angry stockholders of Columbia Pictures Industries Inc. protested the dismissal of former President Alan Hirschfield at the annual meeting yesterday with frequent shouts and occasional curses.
Hirschfield, who was fired in July, after 5 years as chief executive officer, is generally credited with turning the once near-bankrupt company into a profit maker. A stockholder also noted reports that it was Hirschfield who forced the board of directors last year to hire David Begelman, the former head of the motion picture and T.V. division who embezzled funds by forging the names of Cliff Robertson and others on company-issued checks.
One stockholder demanded to know why the board never explained the firing in correspondence to the shareholders. Noting that the former chief executive's name is not mentioned in the current annual report, a shareholder said: "even Nixon, when he was removed, was mentioned as the former president."
Leo Jaffe, 69, chairman of the board and long an important movie industry figure, was clearly flustered by the disgruntled gathering.
He explained there was a "serious erosion" between the board of directors and Hirschfield. "This is not a one man show," said Jaffe, referring to reports that Hirchfield's departure came after a series of power struggles with the board.
Jaffe added it was not just Hirschfield's differences with the board over Begelman that caused the rift.
Caught in the middle of the fray was Columbia's new president Francis Vincent Jr., who was named as Hirschfield's successor on July 21.Vincent, 40, was a high official at the Securities and Exchange Commission for a brief time before joining Columbia. Before that, he was a partner in the Washington law firm of Caplin & Drysdale.
Vincent stressed that he had already set up internal controls to try to head off a recurrence of recent defalcations at Columbia. In addition to Begelman's embezzelment, there an accountant at the company's EUE-Screen Gems division allegedly embezzled $345,000 during three years. She fled the country in April and is still a fugitive.
Vincent said he has expanded the internal auditing department from 3 to 10 persons. The results will report directly to him, he said. Price Waterhouse is completing a survey on the company's internal accounting controls. In addition, an SEC probe of the company, which was triggered by the Begelman affair, has not been completed, Jaffe told the stockholders.
The stockholders pressed Jaffe about why Melnick, who replaced Begelman as president of the movie division, quit recently after only about 8 months in the job. Jaffe claimed Melnick took on the job reluctantly and left to become an independent producer with an exclusive contract to films for Columbia.
He denied published reports that Melnick quit because a close friend of David Belgelman, Sy Weintrab, was hired over top of him and made a board member chairman of the film entertainment group: - essentially Begelman's old job.
Is Weintraub an extra or a stand in for Begelman, asked a stockholder?
"He is not a schill or stooge for Mr. Begelman," Jaffe angrily reported.
The proxy statement for the annual meeting reports that Weintraub had lent Begelman $25,000 he needed to repay Columbia after his embezzlement was discovered. It says that Weintraub had been repaid by Begelman, who has been given an exclusive contract to produce movies for Columbia.
Vincent was applauded by the stockholders when he ended his presentation by promising: "I will give you a complete day's work. I accept responsiblity for leading your company, and, I tell you, I will lead it."
Earlier, Vincent reported Columbia had net earnings of $11.2 million for the first quarter that ended Sept. 30, up from $8.7 million for the same period a year earlier.
He announced a special dividend of 40 cents a share for fiscal 1978, and he said the company would begin paying a dividend of 10 cents a quarter. The company had not paid a cash dividend since 1970.