The Tyco International Ltd. board member who ran ADT Corp. before it was acquired by Tyco resigned from the board yesterday in an effort to speed the company’s reorganization.
Lord Michael Ashcroft, the chief proponent of a plan to replace Tyco board members in office when former chief executive L. Dennis Kozlowski allegedly stole more than $170 million, yesterday announced his departure. In a letter to current chairman and chief executive Edward Breen, Ashcroft wrote ”I have been a vocal and persistent advocate of the wholesale replacement of the current board as the preferred option. Consistent with that lead, I should set the example by being the first to stand down.”
Ashcroft, however, was one of two board members, along with Richard Bodman, who earlier had been expected to stay on. But that arrangement drew criticism from Mark Connolly, a deputy secretary of state and director of securities regulation for New Hampshire, who felt all Kozlowski-era board members should be replaced. After acquiring ADT in 1997, Tyco moved its headquarters to Bermuda from Exeter, N.H., where it still has offices.
Breen’s plan was to use two directors as nonvoting consultants. Ashcroft was not necessarily a front-runner for a consultants’ post. In accepting Ashcroft’s resignation, Breen said he would miss his ”wise counsel and leadership.”
Meanwhile, Kozlowski is expected to appear in a New York courtroom this morning, the first scheduled after his arraignment in September.
Kozlowski, 55, and codefendant Mark Swartz are expected in court, said an official with New York District Attorney Robert M. Morgenthau’s office.
Kozlowski and Swartz, Tyco’s former chief financial officer, were both named in an indictment on Sept. 12, charging them with stealing over $170 million from Tyco and obtaining more than $430 million by fraud through the sale of stock. Former general counsel Mark Belnick was charged separately with falsifying business records in an effort to conceal more than $14 million in loans from the company to himself.
Today’s hearing is expected to deal with scheduling issues such as when motions in the case should be filed, said a spokesman for Morgenthau.
Jerome York is expected to be named to replace Lord Ashcroft. In September, Tyco said that York, chairman, president, and chief executive of Micro Warehouse Inc., would be the first of five nominees to the new board.
Tyco spokesman Gary Homes had no comment on the matter yesterday.