 about corporate governance. The company's IPO raised $380m at a time when Black wanted money for more acquisitions. But the listing exposed him to US regulators. In retrospect, he would have been far better off listing in Toronto or London.
Black was convicted of three counts of mail fraud, a crime which does not exist in the UK or Canada, namely using the postal service to send cheques and documents relating to 'non-compete' fees from companies who acquired Hollinger assets. The most telling reaction on these charges came from one of the companies which paid Black these fees.
David Asper, the Executive Vice President of CanWest, which bought Hollinger's Canadian assets, said that his company "wanted and were willing to pay for the non-competition agreement with Conrad Black and his colleagues, in their personal capacities. If Lord Black ever decided to sell his interest in Hollinger, it is he - and not Hollinger - with whom we did not wish to compete. So what's the fuss?" In other words, these fees were never meant for shareholders.
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| Former Treasury Secretary Robert Rubin has warned against this new risk- adverse culture |
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Black was also convicted of obstructing justice by removing boxes of documents requested by prosecutors from his office in Toronto. Black returned the boxes a week later. None of the juicy stuff - the laundering and racketeering - held up in court.
In the meantime, many other companies have added the treatment of Black and the Hollinger board to the growing list of reasons to withdraw from the public markets.
In a world where company directors can find themselves in jail because the accountants mess up, fewer and fewer people are willing to serve on corporate boards. The number of international companies choosing to list in New York has dropped dramatically as has the "listing premium", the bump in value foreign companies got from listing in America.
All of this will be cold comfort to Black as he prepares to appeal the verdict and fights to keep what remains of his assets from U.S. authorities. But it should be a lesson to any foreign company thinking that locating in the United States or tapping its equity markets is a risk-free opportunity. 
FIRST POSTED JULY 16, 2007
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