“As previously stated, Seven did not condone or authorise the alleged payments to Mr Lehrmann referred to in the affidavits recently made public. The person involved admitted to the misuse of a Seven corporate card and all unauthorised expenses were immediately reimbursed. Seven has acted appropriately at all times.”

The reopened defamation case has drawn further attention to the workings of Seven’s Spotlight program.

One of Australia’s top governance advisers, Vas Kolesnikoff, the ANZ’s head of institutional investor advisory firm ISS, said Seven “has to explain this, to themselves and everyone else”.

“Optically, it’s not a good thing from an investor perspective,” he said.

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Most of the shares in Seven West Media, owner of the Seven Network, are controlled by Kerry Stokes and his company Seven Group.

Its share price languished at 18¢ at the close of business on Thursday, down 56 per cent across the past year and only marginally above last month’s near-four-year low of 18¢.

The flurry of attention on Spotlight arrives at an unfortunate time for Seven, two months after delivering its worst ever half-year result and with its chief executive James Warburton readying his departure.

Warburton will depart Seven in the coming months, and the company’s senior executives, including chief financial officer [and new CEO] Jeff Howard will have to face scrutiny over the allegations raised by Auerbach, says Kolesnikoff.

“The accountability of the board is to shareholders,” says Kolesnikoff. “Even he [Stokes] would want appropriate standards in place for how the company does business.”

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