New questions arise over Redstone's competency after he alters trust

Sumner M. Redstone.
Sumner M. Redstone.

NEW YORK • The mental competency of ailing 92-year- old media mogul Sumner M. Redstone is, once again, at the centre of a bitter dispute.

Viacom and its chief executive Philippe P. Dauman fired back last Saturday, attempting to discredit a sudden move by Mr Redstone to change succession plans for his US$40-billion (S$55-billion) media empire.

Not only did Mr Dauman and two Viacom directors raise questions related to Mr Redstone's competency, but they also declared that Mr Redstone had been manipulated and used by his daughter.

The renewed scrutiny over Mr Redstone's capacity came less than two weeks after a California judge dismissed a case on a similar issue without ruling on whether Mr Redstone was mentally competent.

It was sparked by an unexpected development last Friday, in a family and corporate tale that becomes messier by the week. Mr Redstone ousted Mr Dauman from the trust that will control his companies when he dies or is declared incompetent.

He did so after expressing dissatisfaction with the performance of Viacom, according to a lawyer working on Mr Redstone's behalf.

Mr Dauman was also removed from the board of National Amusements, the private theatre chain through which Mr Redstone controls both Viacom and CBS.

Also ousted from both positions was Mr George Abrams, a 50-year representative of Mr Redstone, a Viacom director for 29 years and an ally of Mr Dauman's.

The development set off a new round in a long-running battle pitting Mr Dauman, Mr Redstone's long-time confidant, against Ms Shari Redstone, Mr Redstone's once ostracised, recently reconciled daughter. She has publicly opposed Mr Dauman's leadership at Viacom and his removal from the trust is a significant victory in her effort to shape the future of her father's companies.

She is vice-chairman of Viacom and CBS and is one of seven members on the trust.

But in biting language last Saturday, Viacom executives and directors joined forces to depict the ousting of Mr Dauman and Mr Abrams as a shameful attempt by Ms Redstone to influence her father and gain control of his companies.

They also portrayed Mr Redstone as being in such failing health as to be unable to make such a decision.

Mr Carl Folta, a Viacom spokesman, said in a statement that Mr Redstone had been unduly influenced by his daughter "to accomplish her long-held goal, which Sumner M. Redstone has always opposed, of gaining control of National Amusements and Viacom".

He said the move to oust Mr Dauman and Mr Abrams was "completely inconsistent with his long expressed wishes and intent, and extremely disruptive and damaging to Viacom and all of its shareholders".

Mr Abrams said: "The Sumner Redstone I knew would never have taken this action."

Mr Frederic V. Salerno, Viacom's lead independent director, raised questions about Mr Redstone's competence, saying the board decided last week to eliminate his compensation "based upon his recent complete lack of communication with the Viacom board and management team and his silence during recent board meetings".

In a statement last Saturday, Ms Redstone said: "I fully support my father's decisions and respect his authority to make them."

Mr Redstone, who has not been seen publicly since his 92nd birthday party in May last year, will turn 93 on Friday.

While he continues to control Viacom and CBS, much about his condition has been shrouded in mystery beyond the fact that he has suffered minor strokes and has a severe speech impediment.

The transcript of videotaped testimony presented during the trial showed a fiery if somewhat feeble man who responded to some basic questions but could not answer others, such as his birth name.

In a declaration six months ago for the civil suit challenging Mr Redstone's mental capacity, Mr Dauman described his boss as "engaged, attentive and as opinionated as ever".

Mr Redstone's lawyers, in a statement issued last Friday, sought to use Mr Dauman's own words against him. Citing his remarks, Mr Michael C. Tu, a partner at the law firm Orrick, Herrington & Sutcliffe, said "that is exactly the Sumner Redstone who made these decisions".


A version of this article appeared in the print edition of The Straits Times on May 23, 2016, with the headline 'New questions arise over Redstone's competency after he alters trust'. Print Edition | Subscribe