Martha Stewart, the disgraced American businesswoman, on Monday resigned from the board of the company that bears her name.
The expected move came a little more than a week after Stewart was found guilty of obstruction of justice, conspiracy and making false statements to federal investigators who were looking into a suspicious share sale.
Stewart is scheduled to be sentenced in June. She faces a maximum of 20 years in prison, but legal experts suggest she is likely to serve between 10 and 16 months. Stewart has vowed to appeal the verdict.
The self-styled queen of domesticity will remain closely involved with her company, Martha Stewart Living Omnimedia, taking the role of founding editorial director. In a statement, Stewart said her resignation was in the ”best interest” of the company. ”I am heartsick about my personal legal situation — and deeply sorry for the pain and difficulties it has caused our employees,” she said.
There have been questions over whether the company, which is tightly tied to Stewart’s personal image, will survive her courtroom scandal. Shares have fallen 40% since the scandal first came to light and were trading another 43 cents lower yesterday at $9,90.
The company publishes a series of magazines, produces television programming and sells a range of everyday merchandise and furniture. It has already been trying to establish new brands not associated with the founder. Stewart’s own show has already been dropped by CBS and her newspaper column has been axed by the New York Times. As a convicted felon, it is likely that securities regulators would have forced her to stand down if she had not resigned.
In her new role, Stewart will continue to provide creative input on product design and development, as well as writing two books about home-keeping and baking and have a say in the company’s strategic direction and brand.
Stewart’s troubles began when she sold shares in the drug company ImClone Systems in December 2001. Government prosecutors said she had been given a tip by her broker that the company’s founder had been trying to offload his shares ahead of a damaging announcement. They argued that when she was asked about the sale, she conspired with her broker Peter Bacanovic to hide the truth.
ImClone has gone from strength to strength since Stewart sold her shares. The company on Monday reported narrower fourth-quarter losses of $26-million, against $39-million a year earlier. It won approval for its Erbitux colon cancer drug last month.
Bristol-Myers Squibb said on Monday it had revised its 2003 earnings upward and again restated results for the four previous years as it tried to improve financial controls. It readjusted its results last year after admitting it had brought pressure to bear on distributors to buy $2,5-billion of drugs they did not need. The company’s 2003 profits were lifted to $3,1-billionn from $2,9-billion, on sales of $20,9-billion, up from the previously stated $20,7-billion. – Guardian Unlimited Â