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Seven West Media says Tim Worner will stay as boss as shares fall $100m over scandal

Seven West Media has issued its first public statement on the scandal engulfing CEO Tim Worner after a day in which the company’s shares dropped by 8% as shareholders reacted to revelations that he had an affair with a colleague who later received a six-figure financial settlement.

After an emergency board meeting to discuss the issue, the company has insisted that Worner will remain in his role.

It emerged over the weekend that the media company was in a legal battle with Amber Harrison, former executive assistant to the boss of the company’s magazine arm Pacific Magazines. Harrison went public after negotiations with the company broke down.

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After the 18-month affair, Harrison was ousted over questions about her use of a company credit card.

Seven West Media’s main assets include the Seven Network, the West Australian newspaper, its stake in Yahoo!7 and Pacific Magazines.

Today saw the company’s share price (ASX:SWM) close 8% down, giving the company a market capitalisation of $1.1bn – a fall of almost $100m on its opening.

Source: Google Finance

Source: Google Finance

After the market closed, Seven West Media issued its first on-the-record statement on the matter.

The company said that after Worner came clean to his boss Kerry Stokes on the “inappropriate” affair, he had worked to ensure such behaviour was not part of company culture.

The statement:

19 December, 2016: The Board of Seven West Media Limited (Seven) met today in response to the  allegations made by a former employee which contain wide-ranging inaccuracies and false statements.

The fact is a confidential settlement deed was entered into more than two years ago with the former employee, Ms Amber Harrison, who was represented at the time by Harmers Lawyers who (Seven understands) have since ceased acting on her behalf. The settlement deed was approved by the relevant board committee of Seven and continues to be binding.

Seven agrees that the inappropriate consensual sexual relationship made public by Ms Harrison is deeply regrettable and the Chairman has always made clear to Mr Worner that the alleged conduct, even though a personal matter, was completely unacceptable.

Separately, Tim Worner apologised at the time and now, for the inappropriate consensual relationship with Ms Harrison, that commenced prior to his appointment as chief executive, and has been working with the Board and Executive to ensure this improper behaviour is not a part of Seven’s culture.

Mr Worner said: “This relationship finished some years ago and I apologised at the time, and am still trying to make amends. I am obviously filled with the deepest regret and shame. My focus is to continue to work through this in private and minimise the distress to my family. They are the most important people in the world to me and I will continue to fight to repair the damage I’ve caused.”

In relation to the Company’s enquiries into Ms Harrison’s credit card account, it was noted that concerns regarding misuse of her corporate credit card and personal expense claims she charged to Seven, arose from standard expense reconciliation enquiries prior to management and the Board being made aware of the relationship. These were then confirmed in a report carried out by an independent firm of accountants engaged at the request of the audit committee. Allegations by Ms Harrison that this was a vindictive reaction to the misuse of her credit card or arose other than from normal process and policy are rejected.

Confidentiality (including mutual non disparagement) was agreed by both sides in the interests of both sides who were the subject of the allegations, which were resolved on a “without admissions” basis.

The payment, agreed to be made to the former employee in instalments, took into account her solicitors’ strong assertions regarding her needs and fragile emotional stability and were designed to enable her to move on with her life.

Seven is entitled to withhold payment for non compliance with the settlement deed. The former employee failed to progress her complaint in the Australian Human Rights Commission.

Allegations made in her statement which name other employees are rejected totally, including any allegation that other current or former employees have been paid off.

Tim Worner will continue as chief executive.

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