Seven West Media’s board members ‘blindsided’ by Spotlight allegations

The Kerry Stokes-owned media company left its board in the dark over the scandal that plagued the station following scandalous allegations of misspending at the network.

The Seven West board has been blindsided by the scandalous claims plaguing investigative program Spotlight, with the company’s non-executive directors only finding out about the allegations of misuse of spending on prostitutes and drugs via the media.

The seven-person board, led by chairman Kerry Stokes, will take part in a scheduled meeting this Thursday in Sydney – the first since the Spotlight saga began – where the drama enveloping the beleaguered network will be high on the agenda.

The Australian has been told that board members only learned of the shocking allegations – that the company reimbursed Bruce Lehrmann for the cost of prostitutes and illegal drugs – by reading and watching the stories in the media.

It is understood board members have since received correspondence from management outlining the recent events but they are believed to be deeply unhappy about being left in the dark on the matter.

Seven West Media chairman Kerry Stokes.

There are just seven people on Seven’s board – Mr Stokes, who has the controlling stake in the company; his son Ryan, who is believed to be less emotionally attached than his father to the media asset; chief executive officer James Warburton, who will step down from the role on Thursday after five years at the helm; lawyer Michael Ziegelaar; iiNET founder Michael Malone; business executive Colette Garnsey; and company director Teresa Dyson.

Sources told The Australian that management thought the matter regarding Spotlight’s excessive and scandalous expenses had been dealt with at the end of 2022, when one of the show’s then-producers Taylor Auerbach repaid the unauthorised $10,000 he put on the company’s credit card, reportedly after a night out in Sydney with Lehrmann.

No mention of the misuse of the credit card, or of the largesse lavished upon Mr Lehrmann in the lead-up to his June 2023 Spotlight interview, was ever raised at board level.

Seven denies that it reimbursed Lehrmann for the cost of drugs and prostitutes.

Lehrmann also denies the allegation, which was made in court by Auerbach earlier this month.

Sources have told The Australian that board members have expressed a desire for more information at Thursday’s meeting on what unfolded in the lead- up to the expenses scandal that has rocked the network.

Board members contacted by The Australian would not comment on the recent events to engulf the media company.

Outgoing Seven West chief executive officer James Warburton, left, and incoming CEO Jeff Howard.

But it is understood Mr Stokes is furious about the recent events surrounding Seven. “He is absolutely livid,” said one source, who asked not to be named.

Speculation continues to swirl that the Seven Group is eyeing off a sale of the company’s media arm, and is holding out until the price is right.

So far, only one senior figure – Spotlight executive producer Mark Llewellyn – has left Seven since the Auerbach allegations aired, with the industry veteran bearing the blame for the company’s decision to keep Auerbach after he admitted misusing the company’s credit card.

It’s understood that Llewellyn disputes that he made the call to give Auerbach a second chance.

Seven West’s chief commercial officer Bruce McWilliam also left this month, after 21 years at Seven, while Mr Warburton finishes his five-year tenure at Seven on Thursday, although both men resigned before the Spotlight scandal publicly emerged.

Incoming CEO Jeff Howard, who joined Seven West in 2020 as chief financial officer, will take over from Mr Warburton this week.

Seven’s share price closed at 19c on Friday. Five years ago, it was trading at 58c.

Spotlight returned to the screens for the first time in 2024 on Sunday night, with the episode focusing on drug Ozempic and whether it is the miracle cure for obesity.