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Economy & Business: High Drama

2 minute read

Columbia drops a president

When David Begelman was forced out as president of Columbia Pictures, his friends in the movie industry vowed that they would get even. Last week they did. By a 6-to-l vote, the board of Columbia Pictures Industries, the parent company, fired its president and chief executive, Alan Hirschfield, 42. Begelman’s allies on the board pretended that Hirschfield’s dismissal from his $250,000-a-year job was not related to the dispute. Nonsense, said Hirschfield: “I lay it all on the Begelman affair.”

Last fall, after Begelman confessed to the board that he had embezzled $84,000 from the company by forging checks and padding his expense account, some directors wanted to keep the affair quiet. They hoped to protect Begelman, whose smash films (Close Encounters, The Deep) had saved the company. But Hirschfield insisted on suspending Begelman and revealing his wrongdoings. With that, Hirschfield lost support of the board powers, notably his longtime mentor, Investment Banker Herbert Allen. Begelman was indicted for fraud and placed on probation for three years. Even so, he has a $1.5 million three-year contract as an independent producer for Columbia.

To replace Hirschfield, the directors set up a four-man Office of Chief Executive. Its members: Board Chairman Leo Jaffe; Financier Dan Lufkin; Matthew Rosenhaus, president of the company that makes Geritol and Sominex; and the new Columbia Pictures president, Francis T. Vincent. Until last week Vincent was an associate director of the Securities and Exchange Commission. Though Vincent himself was not involved, the SEC has been investigating Columbia Pictures. ∙

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