US financial watchdog the Securities and Exchange Commission looks certain to launch its own investigation into the business dealings of Telegraph owner Lord Black of Crossharbour, who today resigned as chief executive of Hollinger International after admitting hiding secret payments from investors and the board.
There could be more bad news for Lord Black, who today said he would stay on as the group’s non-executive chairman, as the committee is to continue its investigation into the company’s complex financial arrangements.
The committee, comprising independent Hollinger International directors, uncovered £19m worth of secret payments to Lord Black and other key executives.
A Hollinger International spokeswoman today confirmed the initial findings of the committee, which today resulted in the resignation of Lord Black and two of his key deputies, would be passed onto the SEC, which will then decide whether to launch its own investigation .
“We will co-operate fully with any action it decides to take,” she added. If the SEC suspects any criminal charges should be brought, it would then hand the file over the office of the attorney general.
The tycoon agreed to step down after the special committee found the payments were not authorised or approved by either the audit committee or the full board of directors.
The internal committee was set up after Hollinger Group’s second largest shareholder, Tweedy Brown, began a campaign to force Lord Black to explain the missing millions.
It claimed £120m had been paid to Ravelston Corporation and other Black-owned companies, including Black-Amiel Management, “over the past several years”.
It also claimed up to £40m had been paid to executives that should have gone on to the Hollinger bottom line.
Of the total, $16.55m (£9.8m) was paid to Lord Black’s parent company, Hollinger, in 1999 and 2000, and $7.2m (£4.3m) each was paid to Lord Black and the chief operating officer, David Radler, in 2000 and 2001.
The vice-president, Jack Boultbee, and Peter Atkinson, who remains an executive vice-president, were each paid $600,000 (£356,000).
Hollinger said today the committee had also found inaccuracies in earlier filings involving the “amount, authorisation and purpose of such payments”.