Shareholders Challenge Hercules Board to Investigate Possible Anti-Trust Violation and Conflicts of Interests of Director John C
08 October 2004 - 8:51AM
PR Newswire (US)
Shareholders Challenge Hercules Board to Investigate Possible
Anti-Trust Violation and Conflicts of Interests of Director John C.
Hunter WASHINGTON, Oct. 7 /PRNewswire/ -- The AFL-CIO Office of
Investment today asked Hercules, Inc.'s (NYSE:HPC) board of
directors to initiate an investigation into a possible anti-trust
violation by board member John C. Hunter, III. An anti-trust law,
the Clayton Act, bars the same director from sitting on the boards
of competing companies. Mr. Hunter also serves on the board of
Hercules competitor Penford Corp. (NASDAQ:PENX). The Office of
Investment also asked Hercules' board to investigate possible
conflicts of interests regarding these two board seats. Two other
shareholder representatives, the Amalgamated Bank and the Marco
Consulting Group, have raised similar concerns with Hercules'
board. "Letting this issue linger severely compromises Mr. Hunter's
ability, and Hercules' board as a whole, to act as an effective
advocate for investors," said Bill Patterson, Director of the
AFL-CIO Office of Investment. "Hercules' board should act
immediately to reassure investors regarding its corporate
governance practices." The shareholders asked for this inquiry
today, because Hercules' board has not publicly responded to a
complaint filed last month with the Federal Trade Commission (FTC)
by the Food and Allied Service Trades Department, AFL-CIO. The FTC
complaint alleges that Hercules and Penford compete to sell
ingredients to the paper-making industry. The shareholders are
concerned that Mr. Hunter's board membership at both companies may
violate Section 8 of the Act. Penford has publicly stated that it
will cooperate with any investigation by the FTC. Founded in 1923,
the Amalgamated Bank invests workers' retirement savings through
its LongView Funds. With $9 billion in assets under management,
LongView works to enhance shareholder value through corporate
governance reforms at portfolio companies. Amalgamated Bank
currently holds 47,188 shares in Hercules. The Marco Consulting
Group is a registered investment adviser to more than 400
institutional investors who, in the aggregate, own 900,713 shares
of Hercules, Inc. stock. The AFL-CIO represents 13 million working
men and women who participate in the capital markets as investors
through defined benefit and defined contribution plans as well as
through mutual funds and individual accounts. AFL-CIO affiliate
union-sponsored benefit funds have over $400 billion in assets.
Union-sponsored pension funds hold an estimated 1.73 million shares
in Hercules. DATASOURCE: AFL-CIO CONTACT: Cornish Hitchcock of
Amalgamated Bank, +1-202-364-1050; or Greg Kinczewski of Marco
Consulting Group, +1-312-612-8452; or Dieter Waizenegger of AFL-CIO
Office of Investment, +1-202-637-3900 Web site:
http://www.aflcio.org/
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