Roger H Ballou - CDI Corporation CEO Misstatements

Read Roger H Ballou's misstatements to CDI Corporation shareholders. Read his actual words consider the truthfulness of his statements made on record. Is he breaking legal and ethical standards by misrepresenting the truth to shareholders? Read the facts and form your own opinion on the ethics of CDI Corporation and their wholly owned subsidiary Management Recruiters International trading as MRINetwork.

Roger H Ballou President and CEO of CDI Corporation holds phone-in conference calls to allow shareholders to ask questions every quarter, shortly after he releases the CDI Corporation's quarterly results. Anyone can join in these calls, and after Roger H Ballou has read his financial statements, he invites questions from investors and shareholders on the call. The whole conference call is recorded and is available on the internet, for about a week, for anyone to download and listen to. A few days prior to writing this letter, Roger H Ballou held one of those calls on Thursday 26th July 2007.

What followed was, in my opinion, an astonishing misstatement from CDI Corporation's most senior manager that I personally believe to be false and misleading to the shareholders. Read the correspondence below and form your own opinion on the truthfulness of Roger H Ballou's misstatements to shareholders and the ethics of the most senior executive of CDI Corporation.

------------------- Start of 6th email described above sent to Roger H Ballou --------------------

6th August 2007

Roger H Ballou
President and CEO
CDI Corporation

Mr Roger H Ballou

Are you now in denial?

I have known for a long time that you have been avoiding facing up to the issues that I originally raised in a formal complaint to you in 2003. I believe that you have had your ‘head stuck in the sand’ since that time and consistently avoided responding to my many attempts to open dialogue with you about those issues.

However, a few days ago (Thursday 26th July 2007) at your quarterly results conference call you made statements to your shareholders that I believe to be false and totally misleading misstatements. Mr Ballou, that is not ethical or acceptable for someone in your position. That conference call was recorded and is now in the public domain and available for anyone to listen to for at least one week at the web site: ‘shareholder.com/cdi/index.cfm".

The following question was raised at that meeting by a shareholder. I will try to show an extract verbatim:

Question from shareholder:

"Roger, Good Morning to you. Er, Roger we all … we know your, er, company web site is CDIcorp.com, but I have become aware of another one, CDIcorp.info which raises many questions about your company ethics and business practices. Are they true?"

Your reply Mr Roger H Ballou was:

"Huh, Well er, you know I think that, er, you know, we have a, er, disgruntled ex-franchisee, ah, in the UK, ah, who runs that web site. Ah, he ah, has lost arbitrations and court cases and has decided to take his case to the web. Ah, and that’s what it is. Ah, the answer is no they are not true and that’s that."

Question from shareholder:

"So its not true?"

Your reply Mr Roger H Ballou was:

"That’s correct."

Shareholder:

"Right, OK."

Mr Roger H Ballou, what was in your mind when you said that? Is it some kind of mental block that prevents you from facing or admitting the truth?

I (and you) know that for years you misrepresented Mr JW as a regular franchisee to all of the real MRINetwork franchisees. That was a deception that has many implications, as outlined in my earlier mails to you, that you have chosen to ignore. But here we have a new dimension. You appear to be now publicly telling your shareholders that the issues raised on the web site cdicorp.info, are not true. Mr Ballou, I believe that your statement of "No they are not true" to have reached the realms of fantasy. Do you believe that you can hide the truth, with further deception?

1. Are you now pretending that you did not repeatedly represent Mr JW for around 3.5 years as a regular bone-fide franchisee, after his franchise agreement had expired?

2. Are you now pretending that you did not allow Mr JW’s debt to grow and grow over years culminating in the Statutory Demand that you raised against him or his company for the sum in excess of £170,000 (approximately $316,000 USD)?

3. Are you now pretending that when I (as a genuine franchisee) started to inter-work with Mr JW in the false belief that he was a regular franchisee, that Steve Mills (one of your senior executives) did not send me a congratulatory email? Remember that this was in 2002, some time after Mr JW’s franchise agreement expired (Nov 1999) and whilst his debts to you were still climbing towards the unbelievable sum of more than £170,000 (approximately $316,000 USD)?

4. Are you now pretending that Steve Mills did not attempt to coerce me into signing a get-out clause for MRI’s negligence?

5. Are you now pretending that Jonathon Taylor (MRI's financial controller) did not write on the 29th of January 2003: "JW’s agreement expired on 1st of November 1999"?

6. Are you now pretending that Jonathon Taylor did not go on to add: "JW was never the easiest person to contact, but he became even more elusive. He moved offices, and we only found out by chance, voice messages and emails rarely yielded a response, and if he was ever in the office, he never seemed able to take our phone call. Eventually, after weeks of such messages he would call us on his mobile, and act in a very cooperative manner, but no payment was forthcoming. We continued to chase him throughout 2002, albeit at times sporadically."

7. Are you now pretending that Steve Mills did not write to your Corporate board executives (Mr Stuart Jay Executive VP and CEO) and Mr Gregory Cowan (senior VP and Chief Accounting Officer) about Mr JW on 24th Feb. 2003 stating: "In addition, he questioned the validity of our claim, as his contract had expired in 1999, and he questioned the validity of our demand."

8. Are you now pretending that Doug Bugie (Steve Mills’ predecessor) did not write, as far back as 13th June 2000, when his debt was still relatively modest: "Needless to say. The size of the arrearage is balance sheet destroying, it would wipe out our bad debt reserves. CDI, not only MRI are very concerned and are looking for answers".

9. Are you now pretending that Joseph Seiders did not make the statements to the Ohio Courts saying that:

"MRIWW never maintained offices or a place of business in Ohio or anywhere else in the United States?
And,
"MRIWW’s only office and place of business is in Windsor, England"?

You know Mr Ballou that UK franchisees regularly received support and help from your MRIWW support desk in Ohio. There are many examples of these and others within my earlier correspondence to you and can be seen on my web site www.cdicorp.info To reiterate on a few here. As a genuine franchisee, I personally received support from Ohio on more than one occasion. For example, I received assistance from both John Lilley and from Brynda Harris from Ohio. Both of them sent me emails with their footers clearly stating MRI Worldwide, Cleveland. Also, Steve Mills wrote to all UK franchisees where he said: "Where we have moved support the US, as with the IT help desk, Owners will note that the staff are working European hours to maintain a service levels."

All of these things are true Mr Roger Ballou, and I believe that you are fully aware that these things are true. They show your demonstrable track record as a franchisor over a number of years.

Let me now address some other points you made.

You also claim that I have lost arbitrations and court cases.

You know Mr Ballou that that is not true! I have never been through an arbitration process, so your statement that I have lost arbitrations cannot be true! Similarly your statement that I have lost court cases is false. I attempted to get your company into court in Ohio. That is what produced the flurry of what I believe to be misstatements made to the Ohio Courts from Joseph R Seiders (your Senior Vice President and General Counsel and Secretary) about MRI Worldwide not having a presence there. You can see those statements by Joseph R Seiders on my web site and why I believe them to be false and misleading misstatements made under oath by one of your senior board executives to the Ohio Courts. However, on the week of the scheduled trial, the judge was changed to a new and visiting Judge. Your counsel once again, in an attempt to stop the trial, appealed that Ohio was the wrong place to hold the trial. Whilst the resident Judge had previously not allowed this, the new visiting judge aired on your side of that argument and agreed that the US was not the correct location to hear the trial. That Mr Ballou, is not loosing court cases. Nor is it losing one court case, let alone more than one as I believe your statement falsely claims. It is a position where we both backed off and you paid for your legal expenses and I paid for mine. To claim that I have lost court cases is false and misleading to your shareholders!

Now if your memory is really so poor that you really cannot remember the facts and represent the truth accurately, I will happily send you copies of the correspondence that I have made reference to above. Let me know if you need this information again.

I believe, Mr Ballou, that your actions and deception that you created around Mr JW, and continued with for years to your genuine franchisees, to be unethical and morally wrong. I also believe that it demonstrates astonishingly poor business judgment for a company that needs to build a long-term relationship with its franchisees. For years you have continued to avoid addressing these issue by consistently refusing to enter into debate about them. However, I now believe that you have crossed a new boundary by publicly telling your shareholders that the issues raised on my web site cdicorp.com are not true.

Mr Ballou I believe that you as the President and CEO of a publicly listed company on the New York Stock Exchange have not just a moral and ethical obligation to tell the truth in public meetings to shareholders but also a legal obligation to tell the truth to shareholders at such meetings. I further believe that you must correct your misstatements publicly and make it clear that your statements (shown above) made to shareholders was false.

I know that you have a track record of not replying to the vast majority of my emails that I have sent you since 2003 about your ethics and demonstrable business practices as well as the issues raised in my formal complaint to you. However, I urge you to reply to this and indicate when and how you intend to address and correct the false and misleading information that I believe you stated to my fellow shareholders on Thursday 26th July 2007. Please reply by email to me within one week of your offices receiving this email, i.e. by Monday 13th August 2007, with your intended proposals for a public correction to your misstatements. If I do not receive any communication from you by that date I will assume that you do not intend to correct the information that you publicly declared on Thursday 26th July 2007.

Sincerely

Bob Stewart
Shareholder



---------------- End of 6th email described above sent to Roger H Ballou ------------------

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