A local connection to the biggest business story being played out in the worldÔÇÖs newspapers this weekÔÇöthat newspaper baron Conrad Black and his executives plundered assets of publicly-held Hollinger InternationalÔÇöis a story that up to now has never appeared in KelownaÔÇÖs newspapers.
Under normal circumstances, a story of this magnitude wouldnÔÇÖt garner local coverage if Kelowna was unaffected by it, but the exceptional fact is that KelownaÔÇÖs two newspapers have been directly involved in this unfolding scandal.
The corporate shenanigans of former owners of this newspaper and the current and former owners of the Kelowna Daily CourierÔÇöat times the same owners hidden behind a veil of corporate secrecy only recently revealed to its full extentÔÇöhelped bring about a shareholder revolt within the Hollinger International shareholder ranks that has toppled Hollinger executives and may ultimately see them face criminal charges.
A report released this week by a special investigative committee of Hollinger InternationalÔÇÖs board of directors laid out in detail the alleged incestuous ownership of the two Kelowna newspapers that many people at the Capital News suspected for years.
But the Hollinger investigative committeeÔÇÖs report has shed more light on the local newspaper transactions.
While the investigative committeeÔÇÖs report contains allegations that have yet to be proven in court, they have created a public relations nightmare for Conrad Black.
BlackÔÇÖs private company, Ravelston Corp., has issued a statement dismissing the report as “recycling the same exaggerated claims laced with outright lies that have been peddled in leaks to the media and over-reaching lawsuits.”
The Kelowna aspect of HollingerÔÇÖs downward spiral began in 1999 when the Daily Courier was sold by Thomson Newspapers to Horizon Operations, a private company fronted by Todd Vogt, a former executive at HollingerÔÇÖs Chicago office.
But it became clear to anyone doing business with the newspapers that Vogt was not far removed from his former bossesÔÇöthe same bosses who owned the Capital News.The Hollinger investigative report released Tuesday said Horizon was, and still is, owned by Black and his long-time business partner David Radler, ownership Radler admitted during a court case in Kelowna.
According to the report, while in control of a company, Hollinger, owned by thousands of shareholders, Black and Radler dealt Hollinger newspaper holdings to a private company they both had a significant ownership stake in, that being Horizon Operations.
Shareholders now allege that in the Kelowna transactionsÔÇöand dozens of othersÔÇöRadler and Black sacrificed Hollinger interests in favour of their own.
“The special committee has determined that there were numerous fiduciary duty breaches surrounding certain Horizon-related transactions in Kelowna,” the report says.
“These transactions provide a vivid illustration of the manner in which BlackÔÇÖs and RadlerÔÇÖs conflicting loyalties to Hollinger and Horizon damaged Hollinger even when the company was not selling newspaper assets directly to Horizon.”
The Canadian Competition Bureau was involved in the Horizon acquisition of the Daily Courier nearly from the beginni