Chapter 15 - THE BOARD HEARING
Sterling’s special committee held an internal governance hearing.
Not criminal court.
Board oversight.
Victoria attended with counsel.
Rafael had already resigned.
Harrison, no longer employed, appeared under subpoena-like contractual request? More simply by agreement.
The accountants presented:
Returns control failures.
False destruction records.
Synthetic vendor identities.
Broker kickbacks.
Acquisition-period data normalization.
Management knowledge.
The strongest question:
When did Victoria know duplicate resale was not just data error?
Evidence suggested:
At least four months before Harrison vanished.
Maybe earlier.
What did she do?
She directed internal cleanup.
Did not inform Northlake immediately.
Did not inform outside auditors promptly.
Allowed historical handler fields to be altered.
Continued acquisition negotiations.
That was severe.
Victoria argued:
“I believed the company could correct internal records before disclosure once values were verified.”
Possible business judgment.
But Northlake’s diligence instructions required notification of potentially material compliance issues.
Her acquisition counsel had warned against altering historical data.
She proceeded.
Then:
Why not external investigation after Harrison showed duplicate serials?
“We were trying to determine scope.”
Why use placeholders?
“Rafael exceeded my instructions.”
Why continue after seeing Harrison’s image on Voss?
“I told him to fix it.”
Why approve later manifests?
“I did not review every underlying identity.”
Possible negligence.
Then voice memo:
Let him explain why his credentials are everywhere.
Victoria’s expression changed.
“That was frustration.”
Maybe.
Then Rafael testified.
“She knew we were making Harrison the operational story.”
“What does that mean?”
“We wanted Northlake to see control failures below executive level.”
“Did she order you to fabricate evidence?”
“No.”
Important.
“Did she know you were moving records onto Voss?”
“Yes.”
“Did she know Voss used Harrison’s photo?”
“Yes.”
“Did she stop you?”
“No.”
Then Victoria’s attorney attacked Rafael.
Kickbacks.
Liar.
Cooperation deal.
All true.
No one witness solved everything.
The board terminated Victoria for cause based on governance findings before criminal trial.
Not because criminal guilt had been proven.
Employment standard different.
Her equity treatment went into litigation.
Some vested shares remained hers.
Some transaction-linked compensation disappeared because acquisition had not closed.
She did not become penniless.
The board appointed interim CEO from outside family.
Sterling founder Malcolm publicly supported the process.
No emotional family speech.
Company survival.
Then Northlake returned.
New preliminary offer:
$258 million.
Subject to settlement reserves for return claims.
Sterling shareholders hated the reduction.
But the company still had value.
May you like
The scandal cost money.
Not existence.
