Redstone removes Dauman from trust as Viacom battle enters new phase

Philippe Dauman

Viacom owner Sumner Redstone has hit out at CEO and executive chairman Philippe Dauman, saying he has made “baseless attacks and misrepresentations” and removed him from a trust that controls Viacom and CBS.

A bitter war of words has since broken out with media commentators suggesting Redstone’s move is designed to put his daughter Shari in place to succeed him, not the previously anointed Dauman.

Redstone released a statement claiming Dauman’s fellow Viacom board members George Abrams, Frederic Salerno had ignored requests for a briefing on improving Viacom’s “outlook and business shape”.

Ninety-two-year-old Redstone is allegedly concerned by Dauman’s strategy to sell a significant minority stake in Viacom film unit Paramount Pictures, and has moved to confirm he remains mentally competent to run his businesses after Viacom board members said they no longer had access to him.

“Instead, Viacom criticised Mr Redstone for not speaking while participating by phone in a board meeting that followed,” the statement read. “As Viacom knows well, Mr Redstone has significant speech impairment and, for much of the past two years, has not relied on verbal statements at board meeting to make his opinion known.”

Redstone has removed Dauman and Abrams from the board of trustees at National Amusements, the parent company of both Viacom and CBS Corp “based on what Mr Redstone believes are the best interests of beneficiaries and shareholders”.

The board is expected to select Redstone’s successor, though the statement said he remained “engaged, attentive and as opinionated as ever” – echoing words spoken by Dauman six months ago.

“Viacom’s false and unfair statements to the media, as well as Mr Dauman’s opportunistic claims of incapacity, now make it problematic to move forward with any direct meeting and briefing as Mr Redstone had previously requested,” the statement continued. However, “Mr Redstone remains intent on receiving the briefing through his advisers, a request that still has not been responded to despite Mr Redstone’s rights as a director,” it said.

“Unless Viacom’s board presents a concrete plan that convinces him otherwise, Mr Redstone continues to believe that it is in the best interest of Viacom that Paramount Pictures should remain wholly owned by the parent company,” the statement continued.

“Mr Redstone regrets that Mr Dauman has diverted resources to these baseless attacks and misrepresentations, rather than focusing on the continuing challenges that are faced by Viacom.”

Viacom said it was “troubled” by the developments. In a statement, it claimed Redstone had been briefed and issued a counter claim that the media mogul had in fact refused to meet Viacom directors. “Despite numerous requests, Lead Independent Director Fred Salerno and a fellow board member, who represent all shareholders, have still been unable to meet with Mr Redstone. The Sumner Redstone we knew would never refuse a meeting about his businesses and he certainly would not want advisors to stand in for him. Mr Salerno and his fellow Directors remain willing and eager to meet with Sumner at any time.”

Shari Redstone, meanwhile, issued her own statement: “l fully support my father’s decisions and respect his authority to make them.”