The Securities & Exchange Commission Monday filed a motion in federal court to force Gemstar TV Guide to leave in escrow about $40 million due two former execs as the agency conducts a probe of the company’s accounting.
It’s the latest salvo in a dispute over the compensation of Gemstar’s former chairman-CEO Henry Yuen and chief financial officer Elsie Leung. They were pressured to step down last year after Gemstar’s stock tanked and it took billions of dollars in writedowns. Scrutiny of the company’s books has resulted in restatements of earnings and an SEC inquiry.
At the agency’s request, Gemstar froze $37.6 million promised to Yuen and Leung. Gemstar’s largest shareholder, Rupert Murdoch’s News Corp., also was said to be in favor of freezing the payments. In an unusual move, Yuen and Leung filed suit against the SEC for unlawfully pressuring Gemstar to keep the cash. But a judge has denied Yuen’s request for a preliminary injunction against the SEC.
Several weeks ago, Gemstar fired Yuen from his role as an international consultant and kicked him off the board of directors as his battle with the SEC grew more heated. The commission has filed contempt-of-court charges against Yuen and asked a federal judge in Los Angeles to jail and fine him for not cooperating with its investigation after he missed several scheduled testimony dates.
Yuen’s reps say Gemstar is trying to find a way to stiff him out of his settlement and they fear the SEC will try to seize the cash.
New division, exec
Separately, Gemstar said it appointed Ian Aaron head of a new division called TV Guide Television. Unit will oversee TV Guide’s branded cable and satellite TV assets, including TV Guide Channel, TV Guide Interactive Program Guide and TV Guide Intl. He will report to Gemstar CEO Jeff Shell.
Aaron was previously CEO of TVN Entertainment.