Viacom board members to fight removal attempt
01 June 2016
Viacom board members who are preparing to fight for control of the media company, yesterday pledged to counter an expected campaign by the ailing media mogul Sumner Redstone and his family to shake up the board, in an unusual step.
In a letter to shareholders and employees, Viacom's lead independent director Frederic Salerno yesterday said that the board would fight any board removals in court in Delaware, where Viacom is incorporated.
Sumner Redstone and his family do not see eye to eye with leaders of Viacom, which has seen its stock plummet more than 45 per cent in the last two years. The family controls 80 per cent of the Class A voting shares of Viacom, but holds an economic stake in the company of about 10 per cent.
Sumner Redstone's recent move of adding a prominent Los Angeles litigator, Michael Tu, who specialises in securities law, to his legal team is being seen as the start of a campaign to dump Viacom chairman and chief executive Philippe Dauman and other members of the board.
''We will contest the purported removal if it comes, because we see that as our responsibility to the non-control shareholders of Viacom who own 90 per cent of the equity of the company – and to the legacy of a man we greatly admire and consider a dear friend,'' Salerno wrote in yesterday's letter.
Salerno added in the letter that an attempt to remove directors ''would be completely inconsistent with Sumner's lifetime commitment to an independent board and professional management for Viacom after his incapacity or death.'' The board had backed Philippe P Dauman, Viacom's embattled chief executive, in a fight over Redstone's companies.
According to commentators, the letter which has been sent on behalf of Viacom's independent directors, preempts any public moves by Sumner Redstone or Shari Redstone to remove board members. They add that any step to change the board would be seen as a move to dismiss Dauman.