Three former and current directors that served as Hollinger International Inc.’s have received notices from the U.S. Securities and Exchange Commission that they may be sued for failing to spot the alleged fraud at the newspaper publishing company, the New York Times reported on Thursday.
Citing a person close to the company, the Times said the directors who received Wells notices were James Thompson, a former governor of Illinois; Richard Burt, a former U.S. ambassador to Germany; and Marie-Josee Kravis, the wife of buyout pioneer Henry Kravis.
The directors were Hollinger’s audit committee from 1998 to October 2003, when Kravis left the board, according to the report. It said Thompson and Burt are still on the board and the audit committee.
A Wells notice indicates possible SEC action, but gives the recipient a chance to respond before a formal recommendation by the SEC.
The Times said the Wells notices were filed about a month ago.
Earlier this month, former Hollinger Chief Executive Conrad Black pleaded not guilty to charges he defrauded the company’s shareholders by siphoning $84 million in fees from asset sales and misusing company perks.
Black, who resigned under pressure as Hollinger’s chief executive in 2003, could face up to 40 years in prison and owe millions of dollars in fines and restitution. He also faces several civil suits demanding hundreds of millions of dollars.
Black’s holding companies, including Toronto-based Hollinger Inc. and insolvent Ravelston Corp. Ltd., once controlled a sprawling newspaper empire that included the now-sold London Daily Telegraph, Jerusalem Post, and hundreds of Canadian newspapers.
Hollinger International still owns the Chicago Sun-Times and several community newspapers in suburban Chicago.
A spokesman for the company could not immediately be reached for comment.
