Argus Corporation Limited: U.S. Securities and Exchange Commission Complaint of November 15, 2004.TORONTO -- Argus Corporation Limited ("Argus") (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :AR.PR.A) (TSX:AR.PR.D) (TSX:AR.PR.B) stated that the Securities and Exchange Commission (the "SEC") today filed an enforcement action (the "Complaint") in the United States District Court for the Northern District of Illinois The United States District Court for the Northern District of Illinois is the Federal district court whose jurisdiction comprises the following counties, divided into two divisions: , Eastern Division (the "Court"). The Complaint has been filed against Conrad M. Black, F. David Radler and Hollinger Inc. ("Hollinger") (collectively the "Defendants"). Lord Black is the Chairman of the Board, Chief Executive Officer and a Director of Argus and Mr. Radler is the President and a Director of Argus. The Complaint has named them in their capacities as directors and officers of Hollinger International Inc. ("International") and not of Argus. Argus owns or controls 61.8% of the Retractable re·tract v. re·tract·ed, re·tract·ing, re·tracts v.tr. 1. To take back; disavow: refused to retract the statement. 2. Common Shares ("Common Shares").of Hollinger. In turn, Hollinger owns 68% of the voting shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. and 18.2% of the equity of International. The Complaint alleges that the Defendants engaged in a fraudulent and deceptive scheme to divert cash and assets from International during a period from approximately 1999 through 2003 and concealed their alleged self-dealing from International's public shareholders. The Complaint further alleges certain violations of U.S. securities laws by Hollinger directly and indirectly in its capacity as a control person of International. The relief that the SEC has requested from the Court includes that it: - order the Defendants to disgorge their alleged "ill-gotten gains and/or unjust enrichment A general equitable principle that no person should be allowed to profit at another's expense without making restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained. realized by each of them", including salaries that Lord Black and Mr. Radler received from The Ravelston Corporation Limited Ravelston Corporation Limited is a Canadian holding company that was largely controlled by Conrad Black and business partner David Radler. It held shares in Black's other holding companies, such as Hollinger International, now known as Sun-Times Media Group. , the parent of Argus, from at least 1999 through the end of their employment with International, together with pre-judgment interest thereon; - order each of the Defendants to pay an "appropriate civil monetary penalty"; - impose a voting trust A type of agreement by which two or more individuals who own corporate stock that carries voting rights transfer their shares to another party for voting purposes, so as to control corporate affairs. upon the shares of International held, directly or indirectly, by Hollinger and Lord Black; - permanently enjoin To direct, require, command, or admonish. Enjoin connotes a degree of urgency, as when a court enjoins one party in a lawsuit by ordering the person to do, or refrain from doing, something to prevent permanent loss to the other party or parties. the Defendants from alleged "further violations" of provisions of the Securities Exchange Act of 1934 (the "Exchange Act") and Rules thereunder; - bar Lord Black and Mr. Radler from serving as an officer or director of any issuer required to file reports with the SEC pursuant to certain sections of the Exchange Act; and - retain jurisdiction over the action to implement and carry out the terms of all orders and decrees that may be entered. The SEC's News Release with respect to its Complaint may be viewed online at: http://www.sec.gov/news/press/2004-155.htm. A link to the Complaint is online at: http://www.sec.gov/litigation/complaints/comp18967.pdf. The allegations of the SEC are unproven and the amounts of the disgorgement Disgorgement A repayment of ill-gotten gains that is imposed on wrongdoers by the courts. Funds that were received through illegal or unethical business transactions are disgorged, or paid back, with interest to those affected by the action. and fines that the SEC intends to request are not disclosed in the Complaint or in its News Release. Accordingly, the extent of any potential financial impact on Argus can not be presently determined. Hollinger announced today that its independent directors have instructed its U.S. counsel to vigorously defend the Complaint. |
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