For Immediate Release
Tuesday, October 03, 2000
AFSCME Files Complaint with Securities and Exchange Commission
Union asking for complete disclosure of conflicts by Tenet dissident group
WASHINGTON —The American Federation of State, County, and Municipal Employees (AFSCME, AFL-CIO) today filed a complaint with the Securities and Exchange Commission requesting the securities regulators to compel greater disclosure by the dissident slate of directors currently opposing the nominees of the Tenet Healthcare Corporation (NYSE: THC - news) in a vote to take place October 11 at Tenet's annual meeting.
The complaint by AFSCME comes on the heels of a letter the public service union sent to shareholders last week urging them to reject the dissident slate headed by Dr. M. Lee Pearce because of conflicts of interest of Dr. Pearce and other members of his slate. Pension funds in which AFSCME members are plan participants own 6.5 million shares of Tenet common stock, or approximately two per cent of the outstanding shares.
The complaint details inadequate disclosure by the Pearce Group nominees in its definitive proxy materials, including a communication sent out last Friday seeking to refute AFSCME's initial communication to shareholders.
The complaint alleges that the Pearce materials fail to disclose adequately:
- The nature of Pearce's litigation against and other challenges to Tenet
- The extent to which properties and businesses in which certain Pearce Group Nominees have interests that compete with, or plan to compete with, Tenet's own business activities.
AFSCME asserts that this information is material to Tenet shareholders' voting decisions because it raises conflict of interest concerns relating to the Pearce Group Nominees and casts doubt on their ability to serve the interests of all Tenet shareholders if elected to Tenet's board.
The complaint asks the Securities and Exchange Commission to direct the Pearce Group to disclose:
- The full extent of the litigation Pearce-controlled entities have against Tenet and/or third parties which directly affect Tenet or any of its subsidiaries;
- Pearce's ownership of real estate holdings that compete with Tenet facilities; and
- The name and business plan of any entity controlled by any Pearce Group nominee that competes or plans to compete with Tenet's operations or Internet ventures.
"It is well past time for Pearce and his group to fully disclose their current conflicts and potential conflicts with Tenet. The Pearce group's initial disclosure is wholly inadequate and their recent letter merely perpetuates their approach of giving shareholders an incomplete accounting of their interests and corporate governance record," said Michael Zucker, director of AFSCME's Office of Corporate Affairs.
Editor's note: Full text of AFSCME's complaint online. Print copy available upon request.
