Former Tyco International Ltd. Chief Executive L. Dennis Kozlowski invested $5 million in a private stock fund managed by a Tyco outside director, raising more questions about the independence of the troubled conglomerate’s board, Wednesday’s Wall Street Journal reported.
Richard S. Bodman, who has been a Tyco director since 1992, said Mr. Kozlowski invested the money in mid-2000 in a $43 million fund he managed, which aimed to invest in the stocks of then-highflying technology companies. Mr. Bodman, who is 64 years old, said the investment had nothing to do with Tyco, and never compromised his independence. “Dennis never asked me for any favors, nor did I give any favors,” he said.
A person close to Mr. Kozlowski said he had been asked to invest in the fund by Mr. Bodman while the two were on board a Tyco jet. This person added that Mr. Kozlowski told Tyco officials about the investment at the time. A Tyco spokesman said the investment didn’t need to be disclosed because it didn’t involve the company.
Mr. Bodman is a member of Tyco’s audit committee and of its corporate governance and nominating committee key oversight panels that are supposed to help ensure that shareholders’ interests are safeguarded against any management malfeasance. Tyco’s board has come under fire in recent months, amid criminal charges that Mr. Kozlowski and other former top executives looted the company of tens of millions of dollars in undisclosed compensation. They have pleaded not guilty to the charges.
The revelation is also surprising because Mr. Bodman, an executive with long technology-industry experience, has been among the board’s leaders in pushing for reform at Tyco since early this year.
Last month, Tyco disclosed that three of its other board members had undisclosed financial dealings with the company in recent years. Two had leased aircraft to Tyco, while another had received $360,000 a year for two years for legal and other professional services.