Kerry Stokes’s new Seven West team not told of Tim Worner affair

Seven West’s Kerry Stokes failed to disclose Tim Worner’s affair with Amber Harrison to three independent directors.

Seven West Media CEO Tim Worner, left, with chairman Kerry Stokes. Picture: John Feder

Seven West Media chairman Kerry Stokes failed to disclose chief executive Tim Worner’s workplace affair with Amber Harrison to three independent directors who joined his board in June 2015.

Multiple board sources have confirmed to The Australian that three Seven West directors learned of the explosive sex, expen­ses and drug scandal only when Ms Harrison went public with her story on December 18.

The lack of disclosure of the scandal engulfing the Seven chief executive, as well as broader concerns about the company’s corporate governance record, is believed to be key to commercial law expert Sheila McGregor’s decision to resign from the Seven West board this month.

Ms McGregor, a lawyer and partner at Gilbert + Tobin, has refused to outline publicly her reasons for leaving.

Mr Stokes, 76, has refused to explain her motives. On Wednesday he responded angrily at a Seven market briefing when asked by The Australian whether the company had requested she not comment on her departure.

“That’s outrageous,” Mr Stokes said. “Are you seriously suggesting I or my board would tell a director what they can and can’t do? How dare you?”

When asked last night about the lack of disclosure to the new board members in 2015, a Seven spokesman said: “This issue was fully considered by directors at the time and since has been fully considered by the board and detailed­ in a number of public statements over the past two months and canvassed during our results presentation. The board has considered the findings of the recent independent investigation and made a public statement on those findings. We have nothing further to add.”

The liaison and extraordinary legal cover-up over more than two years has plunged Seven into a crisis. Its shares have fallen almost 10 per cent since the scandal­ broke in December, wiping­ about $100 million from the media group’s value.

Seven’s external legal costs for the unresolved matter are estim­ated at more than $2m.

Ms McGregor, former Victor­ian premier Jeff Kennett and telco millionaire Michael Mal­one knew nothing of the married chief executive’s affair, which ran from November 2012 to July 2014, when they accepted Mr Stokes’s invitation to join the board. The trio was also not told of Seven’s subsequent deeds with Ms Harrison, once executive assist­ant to then Seven magazine boss Nick Chan, or her claim against Seven in the Australian Human Rights Commission.

That action included allegations of cocaine use by Mr Worner and at least four other affairs with women at Seven, which have been refuted by the network. The named women have also issued vehement denials of having affairs with Mr Worner.

Mr Stokes had known about the Harrison affair since mid-2014, when it is understood Mr Worner offered his resignation. By mid-2015, the Stokes-led board, also including Mr Stokes’s son Ryan, promoted Mr Worner to the company’s board, alongside Ms McGregor, Mr Kennett and Mr Malone, who were unaware Ms Harrison’s claim in the AHRC remained live and unresolved. It is understood the trio of directors had inform­ally discussed the prospect of resigning from the Seven West board in the wake of publication of the Harrison scandal.

The outcome of the review by law firm Allens, which was unable to substa­ntiate Ms Harris­on’s alleg­ations, saw Mr Kennett and Mr Malone form the view that Mr Worner should endure.

Kerry Stokes controls 37 per cent of Seven West. Other direc­tors include stockbroker and former Essendon chairman David Evans, media veteran and James Packer executive John Alexander, and former Stokes executive and longtime adviser Peter Gammell.

The only remaining female director on the nine-member board is venture capital­ist ­Michelle Deaker. Mr Gammell is a director of her One­Ventures vehicle.

Additional reporting: Mitchell Bingemann