Daily Management Review

Access to Redstone Denied to Viacom Board, says the Company


Access to Redstone Denied to Viacom Board, says the Company
Access to controlling shareholder Sumner Redstone has been blocked by his daughter Shari and hence the board members of Viacom Inc have been unable to meet with the media mogul,  the company said.
A day earlier Viacom Chief Executive Officer Philippe Dauman and Viacom board member George Abrams were removed from the seven-person trust that will determine the fate of Redstone's $40 billion media empire after his death. The empire includes Viacom and CBS Corp and Viacom's criticism of Shari Redstone comes a day after the removal of the executives.
"It is clear that Shari Redstone has isolated her father and put his residence on lockdown, which provides clear evidence of her exercise of undue influence," a spokesperson for Viacom said in a statement.
Viacom said that many attempts by Viacom's board to meet with Sumner Redstone have been denied.
"I fully support my father's decisions and respect his authority to make them,” said Shari Redstone in a statement in response.
According to a statement from Michael C. Tu, a lawyer representing Redstone, after Sumner Redstone expressed concerns about Viacom's performance to them and received no response, he removed Dauman and Abrams as trustees and directors of his privately held movie theater company National Amusements Inc.
As younger viewers migrate to online and mobile video, ratings at its cable networks have hit Viacom just like other media companies.
The steps to remove him from the trust were termed as "illegal and invalid" by a spokesman for Dauman.
Giving her more certain control to determine the fate of her father's empire, the move by the elder Redstone is a victory for his daughter. She is also on the trust and vice chair of CBS and Viacom.
In the past, Shari Redstone and Dauman have clashed with each other. The elevation of Dauman by her father to the position of executive chairman in February was opposed by her.
Redstone's privately held National Amusements Inc owns 80 percent of the voting rights in both Viacom and CBS while the Sumner M. Redstone National Amusements Inc Trust owns about 80 percent of National Amusements Inc.
All matters that come to a shareholder vote at both companies, including potential mergers or acquisitions would be controlled by the trust after Sumner Redstone dies or is incapacitated.
Majority support among the trust's members, who include Shari's son, lawyer Tyler Korff, and David Andelman, another lawyer who is on the CBS board, would be enjoyed by Shari Redstone with the removal of Abrams and Dauman.
Norman Jacobs, Sumner Redstone's divorce lawyer, and Leonard Lewin, an attorney who represented Redstone's first wife, Phyllis, in her divorce from Sumner, are the other members of the trust.