Leonard Tow, one of many disgruntled shareholders of Adelphia Communications, said Monday that he intends to exercise his right to appoint three directors to the board of the troubled cable group.
Tow, CEO of telephone company Citizens Communications, owns 12% of Adelphia, making him the largest shareholder after the Rigas family.
“Since the end of March, my family’s investment in Adelphia has lost approximately 70% of its value. I am deeply concerned that the value of our investment could be further eroded. To protect my family’s substantial investment as well as the interest of other minority shareholders, I have determined that I must now enforce my right to be represented on Adelphia’s board,” Tow wrote in a letter to the company’s board and filed with the Securities and Exchange Commission.
Tow became a major stockholder when Adelphia bought cabler Century Communications from Citizens in 1999. Century owned the valuable Los Angeles cable system that Adelphia formally put up for sale last week.
The deal for Century contained a clause allowing Tow the right to be represented on Adelphia’s board — a right he had not enforced until now.
Adelphia shares started a free fall six weeks ago after the company revealed several billion dollars in off-balance sheet loans to private entities also controlled by the Rigas family. The SEC is investigating Adelphia’s aggressive accounting. Company, which announced plans to restate earnings from 1999, has missed several deadlines to file its annual report for 2001.
Tow requested that he be appointed to Adelphia’s board, along with Rudy Graf and Scott Schneider, co-vice-chairmen of Stanford, Conn.-based Citizens.
Adelphia shares fell 1.3% Monday to $6.06 — down dramatically from a 52-week high of nearly $43 in June.