- The Washington Times - Thursday, June 27, 2002

Radio One Inc. yesterday defended a series of loans it gave its top executives, after two days of transactions-related speculation that the Lanham broadcasting company said hurt its stock.
In the past two years, the company has given loans to Alfred C. Liggins III, its president, chief executive officer and treasurer; Scott R. Royster, its executive vice president and chief financial officer; and Linda Vilardo, its general counsel.
The company reported each loan to the U.S. Securities and Exchange Commission (SEC) within days of each transaction. In the past few days, a Wall Street Journal reporter has called several analysts to question the loans and other party transactions within the company, which Mr. Liggins said created "rampant speculation" that hurt Radio One's share price.
On Tuesday, shares of Radio One, which trades on the Nasdaq Stock Market, fell 13.8 percent to $15.17. Shares were trading for $14.59 apiece when the Nasdaq closed yesterday. They have fallen more than 22 percent since the $18.92 close on Friday.
"We are not sure why this has become an issue," Mr. Liggins said in a conference call with reporters and analysts. The company fully complied with federal regulations in reporting the loans, he said.
Analysts said Radio One, one of the largest owners of radio stations in the nation, wanted to quickly squelch speculation that the loans were made in secret. The company did not want investors to view it in the same light as Enron Corp., WorldCom Inc. and other corporate giants that have come under scrutiny in recent months for accounting irregularities, analysts said.
"In the past, companies have taken the policy that you don't respond to rumors. But in this post-Enron, post-WorldCom, post-Global Crossing, post-Tyco world, if you don't answer a charge, it eventually becomes a truth," said James B. Boyle, an analyst for Wachovia Securities Inc.
Mr. Boyle and other analysts said they were satisfied with Radio One's explanation. "There's no story here," said Bishop Cheen, another Wachovia analyst.
The deals were structured as loans to employees for the purchase of company stock and were designed to keep Radio One's top management team intact at a time when other executives were fleeing the company for the then-burgeoning technology sector.
For example, in November 2000, the company gave Mr. Royster 1 million shares at $7 per share, which Mr. Liggins said was the fair market value at the time. The interest rate is 5.5 percent. Mr. Royster is required to repay the loan in 10 years if he stays with the company or within 60 days if he leaves before 2010, Mr. Liggins said.
Mr. Liggins also dismissed a report by the Jefferies & Co. Inc. research group that suggested the SEC is investigating Radio One. Mr. Liggins said the company is not being probed.
A commission spokesman said yesterday that it could not confirm or deny reports about investigations it conducts.

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