Ousted Gradco Founder Faces New Battle

Plenum Publishing Corp. Chairman Martin E. Tash, who succeeded in wresting control of Gradco Systems Inc. from its founder, Keith B. Stewart, in a bitter proxy fight, said Thursday he will seek to remove Stewart from control of Gradco’s Japanese subsidiary as well.

After learning that Tash and his supporters had gained a majority of positions on Gradco’s board through a proxy vote, Stewart said Wednesday he would resign as chairman and chief executive of the company.

However, Stewart said, he would remain chairman of Gradco Japan, the company’s profitable subsidiary, which makes sorters for office copiers. He also hinted that he might try to acquire Gradco or retake control of it in the future.

But the Tash group said in a statement Thursday that it will seek to exercise control, with its Japanese partners, over Gradco Japan “without Mr. Stewart in any capacity.” Stewart declined to respond to the Tash statement.

“We will not engage in a battle in the newspapers,” said Newton H. Lee, corporate secretary of Gradco, who spoke on behalf of Stewart. “It reflects on the fact those people don’t understand the conduct of business in Japan. Stewart shall remain (with Gradco Japan).”

Meanwhile, the company announced that the vote results from its annual meeting last week have been certified by Corporation Trust Co. The five elected directors are Tash and his two associates, Harland L. Mischler and Bernard Bressler, and Gradco nominees Thomas J. O’Keefe and John E. Rehfeld.

O’Keefe is outside legal counsel for Gradco, and Rehfeld is president and chief executive of Seiko Instruments USA in Torrance. The directors will be formally installed at a board meeting to be held at the company offices in Irvine today.

Gradco stock closed at $4.75, up 12 1/2 cents in over-the-counter trading Thursday.