Alexa

Founder Gupta resigns as CEO of InfoGroup

Founder Gupta resigns as CEO of InfoGroup

Database provider InfoGroup Inc. said Thursday its founder Vinod Gupta has stepped down as chief executive.
Gupta's resignation Wednesday was part of a proposed settlement of a shareholder lawsuit, documents filed with the Securities and Exchange Commission said. The lawsuit alleged the company misspent millions _ some of it on former President Bill Clinton and his wife, Sen. Hillary Rodham Clinton.
The news of the settlement sent InfoGroup's shares soaring Thursday. They closed up 19 percent, or 98 cents, at $6.15.
The Omaha-based company said Gupta would remain on the board of directors.
Board chairman Bill Fairfield will replace Gupta as CEO, the company said, and a member of the board, Bernard Reznicek, has taken over as chairman, replacing Fairfield.
Fairfield had been InfoGroup's lead independent director and is chairman of DreamField Partners Inc., a private equity firm.
The company said it had entered a "settlement agreement" with Gupta and others named in a shareholder lawsuit.
Investment manager Cardinal Value Equity Partners and hedge fund Dolphin Limited Partnership filed the lawsuit in Delaware last year.
A spokeswoman for InfoGroup said there would be no further comment Thursday.
A spokeswoman for Dolphin Financial Partners, a private investment partnership in Stamford, Conn., declined to comment.
Rob Kirkpatrick, managing director at Cardinal Capital in Greenwich, Conn., said the proposed settlement would be presented to the judge in Delaware for approval.
Gupta said in a news release that his leaving was "in the best interest of the company" and that he looked forward to new business opportunities.
The SEC filing also said that as part of the settlement, InfoGroup directors George Haddix, Vasant Raval and Elliot Kaplan will be resigning from the board.
The SEC has been investigating spending by InfoGroup, which used to be known as InfoUSA, and certain trades of company stock.
According to the shareholder lawsuit, InfoUSA had 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.
In July, the company said it would sell the company yacht as its first step in reining in expenses. It also said Gupta, who owned 40 percent of InfoGroup stock, had agreed not to buy more company stock through July 21, 2009, and that he would pay the company $9 million over the next five years.
InfoGroup said the payment from Gupta was subject to court approval as part of a future settlement agreement with the shareholders.
In the past, InfoGroup had made sizable payments to a company Gupta owned called Annapurna Corp. for use of a jet plane, the 80-foot yacht American Princess, condos in Hawaii and California and a University of Nebraska stadium box.
InfoGroup eventually took over the lease of what it calls a boat and invested in fractional ownership in a jet from NetJets. Previously, Gupta had said the jet, condos, stadium box and American Princess were for entertaining clients.
The company's new policy will prohibit owning or leasing yachts.
Any related-party transactions between InfoGroup and any business affiliated with an executive or large shareholder will require pre-approval from the board if they cost more than $120,000.
Earlier this month, InfoGroup filed long-overdue financial reports with the SEC.
Its first-quarter net income increased 4 percent to $6.6 million, or 12 cents per share, from $6.3 million in the first quarter of 2007.
The company said revenue rose 21 percent, to $191 million in the period that ended March 31.
InfoGroup has said the first-quarter numbers _ and the 2007 annual report _ were delayed by the SEC investigation and the shareholder lawsuit.
___
On the Net:
http://www.infousa.com


Updated : 2021-03-07 23:51 GMT+08:00