Plenum Out to Unseat Gradco Chief : Proxy fight: Leadership of Irvine-based office equipment company is blamed for firm’s woes.

Plenum Publishing Corp. will seek to oust Gradco Systems Inc. Chairman Keith B. Stewart if the New York publisher wins a proxy fight to unseat Gradco’s directors, according to a federal filing Thursday.

Plenum, which owns or controls 9.4% of Gradco’s stock, said in a filing with the Securities and Exchange Commission that it believes that “the replacement of the present leadership of the company is essential in light of the performance by the company from a financial standpoint.”

While Plenum does not specifically state that it would replace Stewart, it criticizes him for attempting to enrich himself at the expense of the company’s other shareholders.

Plenum and its chairman, Martin Tash, have also made those claims in a shareholders’ lawsuit against Gradco and Stewart that accuses Stewart of trying to buy 12% of the Irvine-based office equipment company’s Japanese subsidiary at below-market costs. The suit, filed in Orange County Superior Court in Santa Ana, alleged that Gradco management tried to misappropriate more than $12 million in company assets in a transaction that awarded management 17% of Gradco Japan.

The New York publisher of technical journals is trying to oust Gradco’s directors and replace them with its own in a proxy vote scheduled Oct. 12.

In Gradco’s own proxy filing with the SEC, which was also released Thursday, Stewart urged shareholders to be patient and said management is seeking to return the company to profitability.

Stewart warned that the proxy fight comes at a “critical time” and could damage the company’s future operations by diverting management’s attention and making customers uneasy.

The Gradco filing disputes Plenum’s suit, saying some of the claims may stem from a lack of understanding of the Gradco Japan transaction, which the company says was undertaken at the request of the subsidiary’s new Japanese investors.

Gradco said it hired Nikko Securities Co. Ltd., a large Japanese financial institution, to determine a fair market price for the Gradco Japan unit’s stock. Tash claims that Gradco management received warrants to buy stock in the subsidiary at prices far below what the Japanese investment group paid. The filing also said that without some investment in the Japanese subsidiary by Gradco management, the company could not have raised $26.5 million from the Japanese investors.

Gradco said some of the warrants awarded to Stewart--totaling 12% of Gradco Japan--would be distributed to management in the future. It also said that, under Japanese law, the shares, once purchased, could not be resold for two years.

Newton H. Lee, Gradco’s corporate secretary, said the Plenum filing contained no surprises. He said the filing left it unclear what plans Plenum has for operating the company.

“They say they want to keep the operating management but not the leadership,” Lee said. “My belief is if (Tash) deposes the management of the company, he will be in dire straits to run it.”

Plenum officials could not be reached for comment Thursday.

Gradco, the world’s largest supplier of sorters for office copiers, lost $28.1 million for its fiscal year ended March 31.