Discovery Group demands to inspect Spanish Broadcasting's voting results

By Lisa Kerner

Charlotte, N.C., June 12 - Spanish Broadcasting System Inc. investor Discovery Group I, LLC demanded that it be allowed to examine the results of the stockholder voting for director nominees at the 2008 annual meeting on June 3.

In a June 11 letter to Spanish Broadcasting, Discovery Group said the company refused to disclose the results despite the investor's repeated requests, it was reported in a schedule 13D filing with the Securities and Exchange Commission.

"We suspect that the results will show that a significant percentage of your class A stockholders withheld their votes for the director nominees," Discovery Group stated in its letter.

"To avoid further embarrassment, we understand that you plan to bury the results in the arcana of a filing with the Securities and Exchange Commission to be made as late as August 2008," Discovery Group added.

Discovery Group made its demand under section 220 of the Delaware General Corporation law.

It was previously reported that Discovery Group, a 9.8% shareholder, announced it would withhold its votes for the re-election of the Chicago-based media and entertainment company's directors.

Discovery Group had urged fellow shareholders "to put the board on notice that the status quo of mismanagement, poor operating performance, excessive executive compensation and weak governance is not acceptable."

While stockholders couldn't prevent the re-election of the company's nominees due to a super-majority voting structure that gives chairman, chief executive officer, president and controlling shareholder Raul Alarcon control, Discovery Group said withholding votes would send a message to the board and management that investors are dissatisfied, a prior news release said.

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