OMAHA — Database provider InfoGroup Inc. will sell the company yacht as one of the first steps in a plan to rein in expenses after forcing the company founder out as chairman.
ANNA JO BRATTON/Associated Press Writer | Posted: Tuesday, July 22, 2008 7:00 pm
OMAHA — Database provider InfoGroup Inc. will sell the company yacht as one of the first steps in a plan to rein in expenses after forcing the company founder out as chairman.
Vin Gupta, a University of Nebraska-Lincoln graduate, got in trouble for a number of excesses.
The SEC is investigating spending by the database marketer, which already faces a shareholders’ lawsuit alleging the company misspent millions — some of it on former President Bill Clinton and his wife, U.S. Sen. Hillary Clinton.
The SEC has also requested documents related to certain trades of company stock.
According to the lawsuit, InfoUSA has spent nearly $900,000 since 2001 flying the Clintons to domestic and international locations and political events.
Gupta has been a major donor to Democrats and gave at least $1 million to Bill Clinton’s presidential library in Arkansas. Gupta also took part in a fundraiser for Hillary Clinton in Manhattan in June 2007.
Stockholders have accused InfoUSA of paying for use of a jet plane, the 80-foot yacht American Princess, condos in Hawaii and California and a University of Nebraska-Lincoln stadium box. In the past, Gupta and InfoUSA have said the jet, condos, stadium box and American Princess are for entertaining clients.
Gupta, who controls 40 percent of the company’s stock, will remain chief executive of the Omaha-based company, which used to be named InfoUSA. The changes are being made in response to the Securities and Exchange Commission investigation and shareholder lawsuit.
InfoGroup outlined its plan in an SEC filing Wednesday.
InfoGroup’s stock jumped 8.6 percent, or 42 cents, to $5.33 in afternoon trading Wednesday.
Gupta also agreed not to buy additional InfoGroup stock through July 21, 2009, and he will pay the company $9 million over the next five years.
InfoGroup spokesman Howard Opinsky said the payment from Gupta is subject to court approval as part of a future settlement agreement with the shareholders who sued the company.
Opinsky said neither Gupta nor the new chairman, Bill Fairfield, were available for interviews Wednesday. Fairfield had been InfoGroup’s lead independent director and he is chairman of DreamField Partners Inc.
The internal board committee that has been investigating the problems at InfoGroup also asked three board members, George Haddix, Elliot Kaplan and Vasant Raval, to resign.
Gupta agreed to support any new board members the nominating committee recommends though the company’s 2010 annual meeting.
The new expense policy will prohibit using company money to pay for personal travel or entertainment, and no personal use of company planes or yachts will be allowed unless it is reimbursed.
The company’s new policy will prohibit owning or leasing yachts.
InfoGroup also said it would appoint a new chief financial officer, replacing Stormy Dean, who will be moved into a new position dealing with corporate strategy and planning.
The company plans to hire a new executive vice president to supervise legal compliance and report directly to the new chairman. That person will also develop new ethics policies for the company.
Investment manager Cardinal Value Equity Partners and hedge fund Dolphin Limited Partnership filed the lawsuit last year. Rob Kirkpatrick, a managing director for Cardinal, declined to comment Wednesday. A representative for Dolphin also declined to comment.
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On the Net:
InfoUSA Inc.: www.infousa.com
Dolphin’s anti-InfoGROUP site: www.iusaccountability.com