Listen: Belinda Alleges Frank’s `Fanciful Schemes’ Eroded Stronach Family Empire
"As the story goes frank stronach arrived in Canada from his native Austria in Nineteen fifty four with two hundred hundred dollars in his pocket and the hope of opening a tool and die shop that shop eventually became the auto parts company MAGNA international which made Strana on a billionaire frank then got involved with thoroughbred racing owning both racehorses and eventually race tracks today the Strana group the spinoff off company for many of the Families Racetrack Operations Owns Gulfstream Park in Florida both tracks in Maryland Loral and Pimlico home of the preakness and of course source the great race place Santa Anita among others over the years. Some of Frank stronach's race track plans heavy listed quizzical looks with one example being the thirty million dollar price tag for the Pegasus statue outside of Gulfstream his daughter Belinda though has done more than look quizzically. Belinda is now the chairman and President of the stronach group and she is suing her father for over five hundred million dollars. She claims claimed that francs pet projects as she calls them have lost the company huge sums of money frank has counter-sued saying that Belinda and a former business partner appropriated family funds for their personal benefit good grief. What will this family feud mean for the Strana Group Group and by extension for the entire thoroughbred industry here in the United States since T S G controls so many influential tracks to people who were quite familiar with the business dealings of the strategic group are writers Joe Connor and Barbara Sector of the financial post a Canadian based publication and we welcome Miss Scheckter and Mr O'connor here to win the gate. Let's start with Mr O'connor. Each side accuses the other of financial malfeasance. What facts do we know through all of this bluster. Well what we do know is what the suit alleges and what I'm frank is accusing blend end of is misappropriating funds and essentially locking him out of the company that his money built and what Glenda is same is. That's not the case and in her countersuit. She's saying well you know. The Truth is here is my dad and I'm quoting is is she's called them idiosyncratic idiosyncratic and often unprofitable side ventures meaning that she believes that her father has a frittered away money on then any projects such as an organic beef farm in California and on a fancy bike electric bike and on other things and that has put the company in jeopardy and that in order to see rescue the company's fortunes. She has to keep her father at arm's length from it. It's a giant. He said see she said as long as that's floating out there and working its way through the court system. It's going to mean some uncertainty. I think the the thing that is sure is that there's going to be continued uncertainty until this gets resolved so so. Michelle after financial controversy has followed the strongbox for quite a while even going back to two thousand ten when they were paid basically to leave magna and it seemed like a little unusual to say the least I mean what do things like this say about the nature of their business dealings things in their character especially as relates to their employees. Well I mean it was very unusual and it was quite controversial in Canada just because because of the the quantum the amount of money that they paid to collapse this dual share structure which gave the Straw nics way more votes per share than other shareholders. I mean it was a common structure in Canada and it's even sort of picking up steam right now in the US and a little bit back in Canada because it allows sort of families as an entrepreneurs to retain control but in the case of Magna and at the time it was an unpopular structure and companies were being pressured to drop it it and stronach agreed to collapse it and leave the company but he demanded what summit called a king's ransom to do so and he was not willing to bend on that it ended up going for Securities Commission and also through the courts with some of the large institutional shareholders like pensions demanding that you know that he takes less money that it was far too much money but he was unyielding and he walked away with exactly what he negotiated with the company who cares what at the institutional shareholders who've been there for varying amounts of time want so it was the same when he was running the company he did things his way he took you know large paychecks and defended them telling people that maybe he even deserved more than he was taking so certainly as strong willed and you know willing to keep pushing his way and getting it so that certainly is the type of personality. We're talking about here. It's a it's not a shrinking violet on either of their counts. What about the potential cultural difference at work here since you have the self made father and daughter who was born into wealth. I think that's a huge the dividing line you see frank who was a child in wartime. Austria who comes to Canada panelists our near to it and has the Moxie to build a company that goes through the roof in terms of its value he built this thing with his hands and I met with them for lunch going going back into the spring and what he said at the time and he wasn't GonNa go deep into the weeds of the actual legal case he wasn't gonNA roll mud necessarily Elliot his daughter but what he did say quite clearly and what was evident in our conversation was that he truly believed that he'd built this. This was whose baby as it were and that his children his daughter and son and their children should be entitled to some of that well but in the form of of a and inheritance in the form of what I think the figure he quoted to me was like I will give my children one hundred million dollars each and they can go on build their own legacy. I can see whereas frank sees. The He sees the race tracks. TST owns he sees the empire as I've been been built by his his money and he believes that he should have the keys to the empire and be able to drive you in whatever direction he"