TORONTO – Conrad Black will be allowed to tell his side of the Hollinger Inc. story at an Ontario Securities Commission hearing later this week in an attempt to show he poses no threat to capital markets.
The OSC panel also agreed Wednesday to allow testimony from two other witnesses proposed by the former newspaper publisher, including his one-time secretary.
However, the regulator emphasized that it doesn’t want lawyers to revisit issues that have already been through the U.S. legal system.
The OSC hearings must not “recharacterize the evidence of the U.S. proceedings,” OSC commissioner Christopher Portner told lawyers for both sides.
The decisions by the regulator started the wheels rolling on a long-delayed process that was sidelined for nearly a decade as Black faced numerous fraud-related criminal charges in the U.S. and ultimately served time in prison for two of them.
The hearings also include allegations against former Hollinger chief financial officer John Boultbee, who was convicted of one count of fraud in the U.S.
Black attended the proceedings this week in anticipation that he will have a chance to speak before the commission, while Boultbee joined by teleconference from his home in British Columbia.
Black’s testimony is scheduled to begin Friday.
“We’ll have no problem dealing with this,” Black said, in a brief comment as he left the courtroom.
The former media mogul, who gave up his Canadian citizenship in order to accept an appointment to the British House of Lords in 2001, has always insisted that he didn’t break the law. He was successful in having most of the U.S. charges against him withdrawn and most of the convictions overturned after a series of appeals.
The OSC alleges Black, along with other directors and officers of Hollinger Inc. and Hollinger International, used non-competition payments to line their pockets with money that should have gone to the companies and their shareholders.
The payments were related to Hollinger International’s sale of a group of small newspapers in the U.S.
“It is a privilege to participate in our capital markets, not a right,” OSC lawyer Anna Perschy said.
“Convicted fraudsters are not welcome.”
Perschy alleged that Black and Boultbee wrongly took $600,000 from Hollinger in the form of non-compete payments and that they have not take responsibility for their actions despite convictions in the U.S.
As the proceedings moved ahead on Wednesday, Black sat alone at a table behind his lawyer, squarely focused on the panel with his hands crossed in his lap.
Boultbee had argued that his case should be heard separately from Black because he could not afford the cost of travelling from B.C. to be involved in a hearing that is mainly focused on Black.
The hearing panel denied Boultbee’s request Wednesday saying there was “substantial commonality in the allegations” and that holding separate hearings would be “duplicate and inefficient.”
If Black loses, he could face monetary and non-monetary penalties and be forced to repay the expenses of the OSC hearings.
Black had sought to have the proceedings dismissed and argued that an OSC temporary order, which has been in place for years, already bars him from being a registrant or a director or officer of a reporting issuer in Ontario.
The OSC case against Black began in 2005, but was adjourned while he faced criminal charges in the United States.
Of the many charges levelled against him by the U.S. Justice Department, Black was only convicted of one count of fraud and one count of obstruction of justice.
He served 37 months of a 42-month sentence in a Florida prison, and was fined US$125,000.
The OSC and Black’s former business partners, David Radler and Peter Atkinson, reached separate plea agreements with the regulator in 2012 and 2013.
Radler pleaded guilty to one count of mail fraud at U.S District Court, and was sentenced to 29 months in jail and ordered to pay a fine of $250,000. He also had to testify against his former colleagues.