Australian Broadcaster Is Under Attack on Twitter, From the Boss's Ex-Loverby
Seven’s attempts to put Worner’s affair behind it are failing
CEO to face investors for first time as earnings released
Australia’s biggest commercial broadcaster is under assault from the boss’s ex-lover.
Seven West Media Ltd. this month cleared Chief Executive Officer Tim Worner following allegations he took illegal drugs and abused expenses during an extra-marital affair with a female colleague. Billionaire chairman Kerry Stokes and his board called the relationship “inappropriate,” but kept private a report into the affair. The matter was over, Seven said.
Not so. Some shareholders want the report into Worner’s affair with Amber Harrison made public. And the former executive assistant, who no longer works for Seven, has taken to Twitter to launch almost daily attacks on the board, calling its inquiry a “whitewash.” She has tweeted images of taxi receipts that she said proved Worner used his company credit card to pay for trips to her Sydney home for sex and excerpts from her settlement with Seven.
Seven’s private handling of the public dispute -- which has included the pair’s sexually charged text messages -- has raised questions about corporate governance at the broadcaster. The affair was made public in December and Wednesday’s first-half results presentation will be the first time Worner has faced investors since then.
“In classic crisis-management terms, a response is required,” said Paul Nelson, founder and managing director of Sydney-based consultancy BrandMatters. “If they believe there was a lot more evidence that was going to come to light, all the more reason to do something about it.’’
Seven on Monday hit back, obtaining an interim court injunction to stop Harrison releasing documents the network says she has no right to hold, access or release. As of Tuesday, more than a dozen of her 74 Twitter posts, including an image of an intimate text message purportedly from Worner, were no longer accessible in Australia.
Seven shares slumped 8 percent the day the affair was made public. After a brief rally last month, they are again below the level they were at before the affair was revealed. The stock gained 0.6 percent to 78.5 cents at 1:37 p.m. in Sydney, valuing Seven at A$1.2 billion ($920 million).
A representative for Seven said the report into the couple’s affair was kept private because it might be subject to litigation, and the individuals interviewed requested confidentiality. The company also said Harrison’s claims couldn’t be substantiated. Harrison didn’t reply to an e-mail or voicemail seeking a response and asking what she wants from Seven.
The saga is Australia’s highest-profile dispute between a female worker and a male CEO in almost seven years. In 2010, Mark McInnes resigned as head of department store David Jones Ltd. and apologized for “unbecoming” behavior after a female colleague complained about his behavior at two company events. The retailer and McInnes later agreed to pay a former publicist A$850,000 ($650,000) to settle claims of sexual harassment.
While Worner kept his job, other executives in similar situations have lost theirs. In the U.S., Priceline Group Inc. CEO Darren Huston resigned after an investigation found he had a personal relationship with an employee. Christopher Kubasik had to give up his CEO job at Lockheed Martin Corp. before he even took up the post in 2012 after the defense contractor discovered a relationship with a subordinate.
Seven, which is based in Perth, reached a confidential settlement with Harrison more than two years ago. But the affair became news in December and the board commissioned a report from law firm Allens. The inquiry found no irregularities in Worner’s credit-card records and said claims of illicit drug use couldn’t be substantiated.
“The report was paid for by shareholders,” said Allan Goldin, a director at the Australian Shareholders’ Association. “Why can’t shareholders see it? What are they hiding?’’
The day before Seven cleared Worner, one of the broadcaster’s two female directors, Sheila McGregor, quit. She’d been in the job for less than two years. Seven didn’t say why she’d resigned.
“I interpret that as being a discomfort either with the lack of transparency around the release of the Allens report or some other aspect of the process the board had undertaken,’’ said Paul Redmond, a law professor and associate director of the Centre for Corporate Governance at the University of Technology Sydney.