NEW YORK – Media baron Conrad M. Black (search), under fire from investors who say he improperly collected millions in fees, announced his retirement Monday as chief executive of Hollinger International Inc. (HLR), publisher of the Chicago Sun-Times (search) and newspapers in Britain and Israel.
In a statement early Monday, Hollinger acknowledged an ongoing internal review had found that Hollinger's parent company, Black and three executives received a total of $32.15 million in unauthorized payments. Black and two of the executives agreed to repay what they owe, with interest, the company said.
Hollinger also said it has retained the investment bank Lazard LLC to explore a sale of the company or one or more of its newspapers.
The company said Black will step down as CEO on Friday and will devote his time primarily to Hollinger's efforts to find a buyer. He will remain as non-executive chairman of Hollinger and will continue as chairman of The Telegraph Group Ltd. (search), a wholly owned Hollinger subsidiary.
The company said Gordon A. Paris has been elected interim president and CEO of Hollinger, with his election as CEO to take effect Friday. Paris is currently a director of Hollinger.
Black has been under pressure from investors who say he and other executives should not have collected a total of $73.7 million from noncompete agreements while selling off several newspapers in the United States and Canada.
In May, Black tried to placate angry shareholders at the company's annual meeting by agreeing to surrender much of his control over the company. But pressure remained on him to give up his post of CEO.
Last Friday, Hollinger informed the Securities and Exchange Commission (search) that it could not file its quarterly report on time because it was investigating questions raised by shareholders.
Tweedy, Browne Co., which owns 13.2 million shares of Hollinger, has raised questions about the fees paid to Black and his associates in noncompete payments linked to the sale of dozens of newspapers by CanWest Global Communications Corp (search). Black has denied allegations of wrongdoing by executives, including himself.
The Sun-Times, in its early edition Monday, made no mention of Black's retirement, but said its own publisher, F. David Radler, had resigned effective immediately. Radler, who was named publisher in 1995, has decided to focus on the development of smaller, community-based newspapers, the Sun-Times said.
In its statement, Hollinger said that a pair of special committees had found that some of the noncompete payments had been unauthorized and that the company's public disclosures about them had been "incomplete or inaccurate in some respects."
Tweedy Browne and other shareholders argue that the fees should have gone directly to the newspaper company. At Hollinger's annual meeting, Black said the fees were "standard industry practice," but when pressed by a major shareholder to name other cases where such fees were paid to management, Black could not.
According to Hollinger, Black and Radler each received and agreed to repay about $7.2 million in unauthorized payments; executive vice presidents Peter Y. Atkinson and J.A. Boultbee each received about $600,000, and Atkinson has agreed to repayment. Boultbee was fired.
The executives could not be immediately reached for comment.
The company said Black also has agreed to seek the repayment of $16.55 million paid to Hollinger International parent Hollinger Inc., where he is the majority shareholder.
Hollinger also announced the resignation of Mark Kipnis, vice president and corporate counsel, and the expansion of job duties for vice chairman Daniel W. Colson, who takes the additional job of chief operating officer.
In addition to the Sun-Times, Hollinger owns The Daily Telegraph, The Sunday Telegraph and The Spectator magazine in Britain, The Jerusalem Post and The International Jerusalem Post in Israel and a large number of community newspapers in the Chicago area.