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Old 12-13-2002, 05:32   #1 (permalink)
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Ford board forms committee to review IPO issue

December 13, 2002
REUTERS

Ford Motor Co.'s board of directors has formed a committee to study a stock deal worth about $8 million to chairman and chief executive Bill Ford Jr., the company said Thursday.

Bill Ford sent an e-mail message to employees explaining his purchase of 400,000 shares of Wall Street firm Goldman Sachs Group Inc. during its initial public offering in 1999, and vowing to never do anything to harm the company or employees' trust in him, a source familiar with the message said.

In a statement, Ford chief of staff John Rintamaki said a committee of five board members will review a shareholder's complaint that Bill Ford was only allocated Goldman's IPO shares because of his high-profile role at Ford, and the tens of millions of dollars in business that Goldman derives from the automaker.

Bill Ford, the great-grandson of company founder Henry Ford, was chairman at the time of the IPO. Ford bought the Goldman stock at $53 per share and it has traded around $74 in recent weeks on the New York Stock Exchange -- giving Ford a gain of about $8.4 million.

Ford, whose family has a long history of business with Goldman, bought the shares with his own funds. But the complaint contends any profits from the shares should go to Ford Motor, and not to Bill Ford as an individual, according to the shareholder's complaint, filed last month by New York law firm Kirby McInery & Squire.

The company did not say when the board committee would complete its review.

U.S. lawmakers released documents in October alleging that Goldman Sachs awarded tens of thousands of "hot" shares, including its own, to executives at companies like Ford that were also major investment-banking clients of the firm.

Goldman Sachs, one of whose senior executives also serves on Ford's board, has denied those allegations.
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Old 12-13-2002, 12:11   #2 (permalink)
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Ford board committee to examine William Ford Jr

According to the New York Times (NYT), the Ford Motor Company board of directors on Thursday announced that it had formed a committee to look into the allocation of shares of Goldman Sachs to William Clay Ford Jr., the company's chairman and chief executive.

The newspaper said Goldman Sachs allocated 400,000 shares to Bill Ford in 1999 as part of its initial public offering. Ford and Goldman have a longstanding business relationship and John L. Thornton, a president and co-chief operating officer of Goldman Sachs, has been a Ford director since 1996, the NYT noted.

The New York Times said Goldman Sachs has received close to $US90 million in banking fees from Ford since 1996 and attention has been focused recently on the personal ties between Bill Ford and Thornton who have been acquaintances since their prep school days in the 1970s.

Spokesmen for Ford and Goldman have denied that the share allocation had any link to Thornton's acquaintance with Bill Ford, the NYT said.

According to the newspaper, the Ford board formed the committee after receiving a letter sent on November 13 by Robert Curry, a lawyer at Kirby McInerney & Squire of New York and a corporate governance advocate.
In the letter, written on behalf of a client, Roger Berger, who owns shares of Ford, Curry requests that Bill Ford sell his Goldman shares to Ford Motor at the $53 he paid for them. Ford would then decide what to do with the shares and with any profit from selling them. The New York Times added that Bill Ford still holds all 400,000 shares.

The newspaper said Berger is not seeking to recover lost investment dollars from Ford. His interest, his lawyer told the New York Times, is to encourage better corporate practices at Ford, which would benefit all Ford shareholders in the long run.

"We are interested in good corporate governance," Curry said, according to the newspaper. "This is the proper and appropriate response from the board and we would expect, at a minimum, that [Bill] Ford would sell his 400,000 shares to Ford [Motor Company]."

According to the New York Times, if Bill Ford does not sell the shares to his company, the next step could be a formal lawsuit.
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Old 12-15-2002, 06:43   #3 (permalink)
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The line blurs between public, private deals for Bill Ford Jr.
12-15-02
By Daniel Howes / The Detroit News

Back in 1999, when Ford Motor Co. was raking in billions, shareholders were happy and non-executive Chairman William Clay Ford Jr. was focused more on getting a new stadium for the Detroit Lions, he bought 400,000 shares in Goldman Sachs Group Inc.'s initial public offering.

Paying $53 each, the shares soared to $130 by mid-2000 but have settled back to roughly $74, representing a paper profit of $8.4 million. If Bill Ford wanted to make a quick buck -- not likely, since he doesn't need the cash and his family has maintained close ties to Goldman Sachs since the 1950s -- he missed his chance.

Now a Ford shareholder is alleging that Goldman Sachs shares were allocated to Bill Ford because he theoretically could use his influence to steer business to Goldman Sachs. The shareholder wants Bill Ford to sell his stake and return any profits to the company he now leads.

Those are the facts we know. Here are some more:

Bill Ford's transaction was a private one, made before he became a Ford employee and was bound by its code against profiting from ties to outside suppliers. Second, the deal appears to have violated no bylaws of Ford's board -- even though a Goldman Sachs executive, John Thornton, is a Ford director. Third, the deal is legal under federal regulations and generally accepted by all but the most stringent corporate governance codes.

There is only one problem -- it just doesn't look right, not now. Too much has changed since the day three years ago when Bill Ford, who understands the importance of integrity more than some think, bought the largest chunk of shares Goldman Sachs offered to individual investors.

Equity markets plummeted, impoverishing some and prodding others to seek scapegoats. Corporate America has been sullied, emboldening regulators to target self-dealing and embrace a pure-as-snow orthodoxy that increasingly appears counterproductive. And Bill Ford is now chief executive of the company founded by his great-grandfather.

This isn't about money. Any boost to Ford's balance sheet from Bill Ford selling his shares in Goldman Sachs would be absurdly small. Dumping the shares to squelch continuing questions would only underscore the notion that Bill Ford did something wrong besides, that is, having the name Ford and long ties to Goldman Sachs.

This is about balancing principle, privacy and public transparency. The campaigners clamping down on real corporate abusers are starting to look more like a cloistered order, demanding purity and freedom from entanglements on all who would sit on boards and run companies. That leaves a lot of talent out.

Do Ford shareholders really want a board of directors laden with artists, college professors and retired union leaders? Or do they need savvy leaders from finance and manufacturing and technology who understand business and have, yes, ties to others like them?

Ford's board is forming a committee to study the shareholder inquiry questioning Bill Ford's Goldman Sachs deal. The board also is undertaking a sweeping review of its broader corporate governance policies, a response to legislation and SEC rules passed in the wake of the Enron and Tyco scandals.

Bill Ford's private finances are his business. But as chairman and CEO of Ford, some of his private choices now have public ramifications. That is the issue.
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