For Viacom and CBS

Sacked trustees fire back in battle

GMT 09:03 2016 Tuesday ,24 May

Arab Today, arab today Sacked trustees fire back in battle

Philippe Dauman, president and CEO of Viacom
New York - Arab Today

The chairman and chief executive of media giant Viacom challenged on Monday the attempt to oust him from elderly billionaire Sumner Redstone's family trust, which controls both Viacom and CBS Corp.

Philippe Dauman, the Viacom chief, and board member George Abrams, filed a court complaint alleging that Redstone's daughter Shari is abusing her power to seize control of the $40 billion media empire against her father's wishes.

But Redstone's lawyers say the colorful 92-year-old tycoon made the decisions himself, and blasted the two for suggesting he was not mentally competent to handle his own affairs.

The lawyers countered Monday by asking a separate court to endorse the removal of Dauman and Abrams.

The moves follow a chain of events that began when Shari Redstone won oversight over her father's health care early this month after a court battle with his ex-girlfriend.

On Friday Shari Redstone, the vice chair of both CBS and Viacom, appeared to consolidate that power after her father dismissed both Dauman and Abrams from the board of National Amusements Trust, the Redstone family trust that has a controlling shareholding in both companies.

- Still 'engaged & attentive' -

A spokesman rejected allegations that Sumner Redstone was not fit to make such decisions and that he was manipulated by his daughter. He criticized both Dauman and Abrams for focusing on estate issues and not on challenges at Viacom itself.

Sumner Redstone remains "engaged, attentive and as opinionated as ever," spokesman Mike Lawrence said, and he removed the two from the trust "based on what Mr. Redstone believes are the best interests of beneficiaries and shareholders."
The spokesman did note that Redstone "has significant speech impairment" and so does not make verbal statements on the important corporate issues.

But on Monday Dauman and Abrams asked a Massachusetts family court to invalidate the order for their removal, saying it represents "an unlawful corporate takeover" by Shari Redstone.

They noted that after they were dismissed from the trust, she installed her own daughter and a friend in positions of power.

"Shari Redstone is attempting to illegally hijack her father's well-established estate plan," Dauman said. "He is clearly being manipulated by his daughter."

"Her singular goal is to assume complete control of his businesses, despite Mr. Redstone's long-term desire for a professionally managed trust and an independent board of directors."

Abrams, a longtime close friend of the tycoon, repeated the allegations that Redstone's capacity to make a decision over the companies is "diminished" and that the decisions were against his longstanding wish to have the two companies professionally controlled and managed.

On Monday Redstone's lawyers countered with a petition asking Los Angeles state superior court to confirm the validity of the dismissal of Dauman and Abrams.

At the time he made that decision, the petition said, Redstone "had not been adjudged incompetent by a court of proper jurisdiction, nor had any medical evidence of incapacity been presented."

It noted that just six months earlier Dauman had told a court Redstone was fully mentally competent.

Shari Redstone meanwhile called it "absurd" to say she controls her father. "Sumner makes his own decisions... and has his own team of independent advisers to counsel him," she said.

- Depressed shares -

At stake is control over two powerful US media companies.
Viacom controls some of the top cable-TV brands including MTV, Nickelodeon, and Comedy Central, as well as Hollywood giant Paramount Pictures.

CBS Corp owns CBS television, Showtime and other media properties.

Viacom's management and Dauman in particular have come under shareholder pressure for the company's lagging performance. Dauman was named chairman in February but had been opposed by Shari Redstone.

For the six months to March 31, the first half of Viacom's fiscal 2016, company revenues were down 4.2 percent at $6.2 billion, but net earnings were up 68.2 percent at $752 million.

The share price remains far below its 2014 peak above $88. Before Redstone's moves became public Friday the shares closed at $39.05. On Monday they jumped 2.7 percent to $40.10 in afternoon trade.

Source: AFP

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