Ozy Media board announces investigation of business practices
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The board of online news magazine Ozy Media said it was conducting an investigation into the company’s business practices following a New York Times report that raised questions about the company.
In a statement, Ozy’s board, which includes Milwaukee Bucks co-owner Marc Lasry, said it has hired the law firm Paul, Weiss, Rifkind, Wharton and Garrison LLP to "conduct a review of the company’s business activities."
On Sunday, the New York Times reported that Ozy Chief Operating Officer Samir Rao impersonated an executive from Alphabet Inc.’s YouTube on a fundraising call with Goldman Sachs Group Inc. Carlos Watson, Ozy’s chief executive, said on Twitter Sunday Rao’s behavior on the call was "deeply unfortunate" and attributed his behavior to a mental-health issue.
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The board said it has asked Rao to take a leave of absence pending the investigation. The board said Harry Hawks, the former executive president and chief financial officer of Hearst Television, has agreed to serve as interim CFO during the review.
Tuesday’s announcement marks an abrupt about-face for the youth-focused media startup, which on Sunday had said that its board had been made aware of the incident involving Rao and had approved of the way it was originally handled. In the statement Sunday, Lasry said Rao’s behavior amounted to "an unfortunate one-time event" and praised Watson for showing compassion toward Rao.