The Hollinger audit committee headed by Winston & Strawn lawyer James Thompson, also the former governor of Illinois, is lambasted in the report for a performance that was “ineffective and careless over a prolonged period of time.”
The catalogue of criticisms of the audit committee is detailed in the report which was filed with the US Securities and Exchange Committee on Tuesday (31 August).
In it, Hollinger International Inc’s former chairman and chief executive Lord Black and David Radler, former chief operating office and former deputy chairman of the board are accused of allegedly colluding to steal $400m from 1997 and 2003.
The report claims that the audit committee was repeatedly mislead by both Black and Radler among others. But the audit committee’s ineffectiveness, says the report, was “primarily a consequence of its inexplicable and nearly complete lack of initiative, diligence and independent thought.”
The report does not accuse Thompson of any wrongdoing.
Canadian law firm Torys is also criticised, along with accountants KPMG for allegedly failing to inform the audit committee where certain management fees and non-compete clauses violated financial standards.