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Hollinger International : TheHollinger International : The

Lord Black SagaLord Black Saga

Arun Gupta

Ashish Nimodia

Arpan Ambastha

Ashish Dash

Ashish Thakur

Arpan Sharma

Arijit Banerjee

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Introduction - Background: Black builds a Feudal empire

Moffat Black born in a rich family, in Toronto.

His father, President of Canadian breweries a part of Argus Corporation.

In 1969, with the help of Shareholders formed a private company called

Ravelston.

1976-85, Hollinger Mines ---- Hollinger Argus limited---- other mining

companies ----Hollinger Inc.

Hollinger Inc made acquisitions in many newspaper companies and formed

Hollinger International.

RMI subsidiary of Ravelston to manage all the newspapers.

Acquisition of Chicago- Suntime, Sydney Morning Herald and Telegraph

Went public but most of the decisions taken by himself by the virtue ofDual share control.

Personal wish to be included in the British House of Lords.

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BLACKS WEB OF CONTROL

Ravelston

Hollinger Inc

HII

RMIArgus

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The Downfall of Lord Black

Twin Towers Disaster

Questioned by Browne for high Management fees

Special Committee Set to Investigate

Hired a investment banking firm Lazard LLC

Cardinal Value Equity Partners LP filed Lawsuit

SEC Compliant Against HII :

Disclosure of Information-1999-2001

HII tempered with the books to misrepresent transfers as non compete

payments.

No suitable internal control to avoid misappropriation of funds

Amount transferred to Hollinger as non complete fees were not disclosed.

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Other Allegations Against Black

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Management Fees

Non Compete Agreements

Personal Extravagance

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Other Allegations Against Black Contd

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Tax Avoidance/Unauthorized Transfer of Cash

Domination over a Weak Board

Failure of Audit System

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MSSMModel

Infrastructure

Organizational Structure

Degree of Autonomy

Style and Culture

External Style(Autocratic Leadership)

Customer Focus

Different Perceptions

Trust

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MSSM Model -Contd

Reward System

Different Pay Structure is followed across the organization

Recognition Programs

Based on Customer Feedback

Coordination and Integration

Lack of Coordination

Many of activities are not disclosed

Controls

Formal Control

Failure of Audit System

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The Ethical Stances

EthicalStances

Short termShareholder

Interests

Longer Term-Shareholder

Interests

MultipleStakeholderExpectations

Shaper ofSociety

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Corporate Governance At Hollinger International

Introduction of new Corporate Governance and code of Business Conduct

and new policies in the organization

New Policies on Related Party Transactions and Whistle Blowing Policies

Comprehensive Charters Audit Committee ,Compensation Committee andthe new Corporate Governance Committee

Formal Job Description were set in place for Chairman of Board and its

Various committees

Creating Openness and Transparency for the Company.

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Conclusion:-

IBS Indore 11

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IBS Indore 12