Viacom Lead Independent Director Says Board Will Fight Any Attempts to Oust It

By Joe Flint 

Viacom Inc.'s board of directors won't exit without a fight.

Anticipating being pushed out by controlling shareholder and former chairman Sumner Redstone, lead independent director Frederic Salerno said in a letter to Viacom constituencies Monday that the board is preparing for a legal battle to keep their seats because they don't believe Mr. Redstone has the mental competency to act of his own free will.

Mr. Redstone, who turned 93 years old on Friday, has yet to make any such move to demand their removal.

But in the past week and a half, Mr. Redstone has overhauled his holding company, National Amusements, and the trust that will oversee his controlling stakes in Viacom and CBS Corp. when he dies or is incapacitated. Viacom Chief Executive Philippe Dauman and board member George Abrams were replaced on the trust and the holding company's board with new stewards who have ties to Mr. Redstone's daughter, Shari Redstone.

In the letter on behalf of the company's independent board members, Mr. Salerno reiterated the board's belief that it is Ms. Redstone, vice chairman of Viacom, who is behind Mr. Redstone's recent decision to remove Mr. Dauman and Mr. Abrams. Ms. Redstone has denied the accusations.

The Salerno letter reflects the independent directors' expectation that their posts could be in jeopardy soon. A removal attempt by the Redstone family "could happen any time," a person close to the matter said Friday. And if it does, those directors expect all six independent members will be ousted rather than just a majority, the person said Sunday.

In the letter, Mr. Salerno said the recent speculation that Mr. Redstone is preparing to remove some or all of the Viacom board "would be completely inconsistent with Sumner's lifetime commitment to an independent board and professional management for Viacom after his incapacity or death." He added that "it would be equally inconsistent with his stated judgment for many years that his daughter, Shari, should not control Viacom or his other companies."

While acquiescing to being dismissed would end the public controversy and avoid litigation, the independent directors "feel the responsibility to challenge in court what we honestly believe would be legally flawed removals." They said it is also their responsibility "to the legacy of a man we greatly admire and consider a dear friend."

Joann S. Lublin contributed to this article.

Write to Joe Flint at [e-mail]

(END) Dow Jones Newswires

May 30, 2016 18:47 ET (22:47 GMT)

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