Black took millions, court told

13 April 2012

PRESS baron Lord Black was last night accused of taking millions of dollars in unauthorised payments from his Hollinger International company.

HI's new chief executive Gordon Paris told a Delaware court that independent directors had never signed off the payments, though company documents suggested that they had.

Chancery Court vice chancellor Leo Strine began hearing Paris's testimony yesterday.

The HI chief was seeking to justify the removal of Black as head of the company and to block a sale of the Daily Telegraph and Sunday Telegraph to Sir David and Sir Frederick Barclay.

Black, in testimony expected later today or tomorrow, will assert his right to sell because while he owns just 30% of it, he controls over 70% through a special class of shares.

HI's board, which has accused Black and his associates of pilfering $200m (£105m), claims that control rests with the majority shareholders. Black has sued the company in Canada for alleged defamation.

The Delaware hearing is expected to last three days with a verdict by the end of the month, just before the Barclays' offer expires.

The dispute now involves nine lawsuits in the US and Canada.

Delaware was chosen for the showdown because HI, like many US companies, is incorporated there.

If Black wins, the Telegraph will go the Barclays. If he loses, other bidders are waiting.

Investment bank Lazard, conducting the auction for HI, has signalled that those wanting to join the second round should offer more than £600m.

Stockbroker Collins Stewart has now formally dropped out of the bidding.

Daily Mail and General Trust was among the first round bidders.

Black acted to raise money on the eve of the hearing, selling $1.6m. worth of options in HI - a small fraction of his total holding.

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