Execs lose trust posts in Viacom power struggle
Print Edition
MEDIA mogul Sumner Redstone has ousted the head of Viacom from a trust with the power to take over his business interests, putting his daughter in position to control his US$40 billion empire, according to a source close to the matter.
Redstone, 92, is the controlling shareholder of Viacom and CBS whose failing health has set off a power struggle between his family and associates.
Philippe Dauman, chairman and chief executive of Viacom, whose units include MTV and Paramount Pictures, received word midweek that he would be removed as a member of the National Amusements Inc Trust, the source said, confirming news reports.
George Abrams, a member of the Viacom board who is close to Dauman, was also removed from the trust, the source said, speaking on condition of anonymity due to the sensitivity of the matter.
Redstone’s lawyer Michael Tu did not immediately respond to requests for comment.
The seven-member trust is meant to manage Redstone’s empire if he dies or is declared incompetent, and would have enormous power and influence over Viacom and CBS.
Dauman and Abrams were also removed from the board of National Amusements, a movie company through which Redstone owns 80 percent voting stake in CBS and Viacom.
The developments — made official on Friday — are seen as a victory for Shari Redstone, Sumner Redstone’s daughter who is a member of the trust and vice president of both the CBS Board of Directors and Viacom.
She had openly opposed Dauman’s appointment as chief of Viacom after her father stepped down. Long estranged from her father, she recently said they have reconciled.
After the exits of Dauman and Abrams, Shari Redstone may be counting on support from remaining trust members, who include her son Tyler Korff and others with links to the family.
Redstone is free to change or replace the members of his trust, media reports said.
But Dauman has called his ouster “shameful” and “illegal,” according to news reports.
“The picture is quite clear, Mr Redstone is being manipulated and used by his daughter in an attempt to accomplish her long-held goal, which Mr Redstone has always opposed, of gaining control of National Amusements and Viacom,” a Viacom spokesman said in a statement provided to AFP on Saturday.
“The actions taken yesterday in Sumner Redstone’s name are completely inconsistent with his long-expressed wishes and intent and extremely disruptive and damaging to Viacom and all its shareholders,” it said.
Last year, Viacom’s share price fell more than 40 percent due to uncertainty over Redstone’s health.
Forbes magazine estimates his fortune at US$5.3 billion.
Although Dauman has not indicated his next move, he is expected to challenge Redstone’s competency to make the decision. The issue has major implications for his business interests.
The mogul’s mental capacity came under question in court earlier this month after his former companion Manuela Herzer filed a suit claiming he was mentally incompetent when he kicked her out of his home and cut her out of his will.
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