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In an exclusive interview, the patriarch of the Magna auto-parts dynasty offers his side of the conflict that has pitted generations of Stronachs against each other – and says he’ll still forgive his daughter, if she says sorry first

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Frank Stronach sat down for a three-hour interview with The Globe and Mail at the Magna golf course in Aurora, Ont., near Toronto.Christopher Katsarov/The Globe and Mail

Frank Stronach says he feels betrayed by his daughter, Belinda, the person he groomed to take over the Stronach Group, the business empire he created from global auto-parts giant Magna International Inc.

In a three-hour interview this week, the self-made billionaire called for a truce – on his terms – even as he accused Ms. Stronach and a key adviser, Alon Ossip, a Toronto tax lawyer who became chief executive of the Stronach Group, of taking control of the family fortune, which includes world-class horse racing tracks, vast real estate holdings and a failed organic farm business.

“They stole the company. It is absolutely true,” Mr. Stronach told The Globe and Mail. “I have been shut out of everything. They manipulated everything. … She screwed me. That is the fact.”

The interview with the 86-year-old industrialist was arranged by Dennis Mills, a former Liberal MP and long-time adviser to Mr. Stronach. Mr. Mills pitched the interview as an opportunity for the family patriarch to make an overture of peace to his daughter and put an end to the nasty legal battle that is tearing apart one of Canada’s richest business dynasties. Mr. Stronach sat down for the interview in a wood-lined boardroom at the upscale, 7,300-yard Magna Golf Club in Aurora, Ont., north of Toronto.

But despite Mr. Mills’s intentions, Mr. Stronach was not in a mood to offer an olive branch to his 53-year-old daughter. The hard-driving, Austrian-born entrepreneur maintains that the only way to repair the fractured family bonds is for Ms. Stronach to give up control of the Stronach Group.

“Yes, I will still forgive her. I will still help her. But I got to say she did wrong and I hope she apologizes for it,” Mr. Stronach said as he lunched on grilled salmon and white wine with ice cubes. “Look, admit you made some mistakes. Admit that the things you did were not right. Most people, if they do something wrong, they [say], ‘I am sorry,’ okay. It doesn’t work any other way.”

Mr. Stronach is suing his daughter and Mr. Ossip for $520-million, alleging mismanagement of the family’s privately held companies. She has countersued, accusing her father, the founder of Magna International and buyer of some of the biggest horse racing venues in the United States, of “improvident spending and unsound business decisions.”

In a statement to The Globe on Friday, Ms. Stronach said her father’s allegations of mismanagement of the Stronach Group are unfounded.

“These are the same inappropriate and unfounded claims my father has been repeating for months, and the facts just don’t match [these] allegations. All transactions regarding the family trusts were made with full transparency and with the full understanding of the intent and the outcome with everyone, including my father and mother, having retained independent counsel," Ms. Stronach said in a statement.

She added: “Sadly, my father has surrounded himself with people who give him bad advice. I love my father and feel sorry for him. I wish he would become more rational again.”

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Belinda Stronach, top, and lawyer Alon Ossip, below, are being sued by Mr. Stronach.Michael Robinson Chavez/The Washington Post via Getty Images; Mark Blinch/The Globe and Mail

The family feud includes Mr. Stronach’s wife, Elfriede, his son, Andrew, and Andrew’s daughter Selena, who have joined his legal action. Belinda Stronach’s son and daughter are part of their mother’s lawsuit against their grandfather.

Mr. Stronach wants the courts to remove his daughter as chair and president of the Stronach Group, allegedly because she spends lavishly on herself and because he questions her stewardship of the family’s main assets, including its profitable race tracks and gambling operations.

Ms. Stronach has hit back at her father’s “idiosyncratic passion projects,” including a money-losing cattle ranch and a failed golf and real estate project in Florida.

Mr. Stronach says his daughter and Mr. Ossip conspired to take the company away from him after he signed over control of the family trust to Ms. Stronach in 2012, when he made a brief stab at electoral politics in Austria. In turning over his super-trustee role to her, he gave her the ultimate authority to name or remove trustees. She added her two children and Mr. Ossip as trustees.

Mr. Stronach says he signed reappointment documents at the time that would allow him to regain control as the supertrustee of the family’s companies whenever he desired. His daughter has said the agreement was never dated and was only meant as an emergency backstop to ensure the family kept control of the business while she was undergoing cancer treatment.

“I gave it up because I trusted the family, okay. When I resigned, I said I could run it again. But I didn’t look for agreements. I would have done it without agreements. My wife feels bad because my son says, ‘You sold me out to my sister,’” Mr. Stronach said.

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Belinda Stronach, right, and her mother, Elfriede, in 2004 celebrating the news of Ms. Stronach clinching the Conservative nomination in the riding of Newmarket-Aurora.Deborah Baic/The Globe and Mail

He also accuses his daughter of manipulating her mother to sign over her voting shares while he was dabbling in Austrian politics.

“Her mother did not know, and that is why Belinda got control,” he said. "She tricked her mother to sign [over] some shares.”

He showed The Globe what appeared to be a legal letter from his wife to himself, Belinda and Andrew in which she says she would not have signed the document if she had known her daughter would bar her father from running the Stronach Group. “I signed the document to give my daughter Belinda control of the Stronach Corporation under the impression that this was what my husband wanted,” Elfriede wrote in the letter, dated March 19, 2019.

Mr. Stronach maintains that he is the wealth creator in the family and that he deserves to be respected for what he has accomplished and allowed to follow his entrepreneurial instincts.

Over the past two years, he said, he tried repeatedly to settle the dispute, even seeking out former Ontario chief justice Warren Winkler to act as mediator. But his daughter wasn’t interested in mediation, he said.

“Just imagine then, she ignores her father. Her father pleaded with her, and I can send letters that I proposed, pleading with her,” he said. “We tried for two years. It’s too late now.”

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Mr. Stronach said he's tried over the past two years to mend the relationship with his daughter.Christopher Katsarov/The Globe and Mail

He provided The Globe with two copies he made of personal letters he sent his daughter in an effort to resolve the family feud.

“I could not dream in my wildest dreams, that we could reach a point where we do not talk to each other,” he wrote in one of the letters, dated Oct. 10 of last year. “I built all those companies from scratch and it is unfortunate that you did not utilize my experience to build the Stronach companies even better.”

He added: “Belinda, it is never too late. I really would like to hug you and welcome you back to the family. The future is in your hands. Call me before it is too late.”

In another letter dated March 19 of this year – the same day his wife wrote about being tricked by Belinda – he urged his daughter to work with him to devise a structure for the family trust to avoid future squabbles.

“Belinda, I did not work hard so that the companies I created can be sold or closed,” he wrote. “I am pleading with you to come back to the family. I would love to work together and manage together with the family.”

In the interview, he complained that Ms. Stronach kicked him out of the company’s offices in Aurora last month and sold the corporate jet last year. “There was no need [to sell the jet]," he said, noting he now flies commercial – something he has not had to do for decades. "There was no need to kick me out of our building.”

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The Magna International head office on Wellington Street East in Aurora. Near the entrance stands a street sign for Stronach Boulevard.Fred Lum/The Globe and Mail

Mr. Stronach, who was known for having a golden touch in the automotive-parts business, has had his fair share of failed business ventures. He has lost money on restaurants, electric bikes, a glossy magazine called Vista and an energy drink named after him.

His daughter has accused him of reckless spending, including $50-million on an 11-storey statue of the winged horse Pegasus defeating a dragon that he had erected on the grounds of Gulfstream Park, a thoroughbred race track in Hallandale Beach, Fla.

What hurt the most, he said, is when his daughter told him he had lost his business magic and that she would not cede control of the family trust back to him.

“Basically Belinda said, ‘Well, you are not as sharp any more. You are of a certain age. You are not with it any more.’ It kind of hurt,” Mr. Stronach said.

He will admit to making only two mistakes.

“I made a mistake in trusting my daughter,” he said. “It was wrong what she did.”

The second was hiring Mr. Ossip, whom he calls “devious."

“He just manipulated her,” Mr. Stronach said.

In court filings and in conversation, Ms. Stronach says Mr. Ossip, who was once a long-time adviser to her father, stepped back from an active role at the family company in 2017 at Mr. Stronach’s request and has no input on corporate decisions.

Mr. Ossip said Mr. Stronach’s accusations have no credibility.

“The suggestion that a strong, independent executive like Belinda Stronach can be manipulated by anyone is ludicrous. Alon has always honoured his obligations and acted in good faith to preserve and grow the Stronach family assets," Mr. Ossip’s spokesman, Paul Deegan, said in a statement Friday. “The allegations are baseless and not grounded in fact or reality.”

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Ms. Stronach in Aurora in 2001, shortly after her appointment as Magna's CEO.John Morstad/The Globe and Mail

In 2001, he appointed Ms. Stronach as CEO and vice-chair of Magna before she left to run for the Conservative Party leadership in 2003, eventually losing to Stephen Harper. Elected to Parliament as a Conservative in 2004, she jumped ship a year later to join Paul Martin’s short-lived Liberal cabinet. The abrupt party switch led to a much-publicized breakup with her then-boyfriend, Conservative MP Peter MacKay.

When she quit politics in 2008, Mr. Stronach named his daughter executive vice-president of Magna, Canada’s largest auto-parts manufacturer.

Now, he questions her ability.

“She has never managed anything. She had a bunch of investments, [and] they all went down the drain,” Mr. Stronach said. “Belinda has a bad record in investing.”

Ms. Stronach lost millions of dollars in 2015 when she was part of a group that established Acasta Enterprises, an acquisition company, with a number of Bay Street insiders. It flopped, and the shares went from an IPO price of $10 to 69 cents as of Thursday’s close on the Toronto Stock Exchange. The money she invested in Acasta was her own, but Mr. Stronach says all her wealth came from him.

Mr. Stronach sold his majority shares in Magna in 2010 for $983-million. The following year, he sold his remaining shares for an additional $700-million in deals that were orchestrated by Mr. Ossip. The race tracks are valued at an estimated $1.2-billion.

Mr. Stronach later named Mr. Ossip CEO of the Stronach Group and gave him a 5-per-cent interest in the company. But under the deal, Mr. Stronach said, he had the right to decide the value of the 5-per-cent share.

Before he turned the family business over to Ms. Stronach in 2012, when he went off to found a new Austrian political party called Team Stronach, the industrialist said the family enterprises were valued at $2-billion.

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The Adena Golf & Country Club in Ocala, Fla., developed by Mr. Stronach.Charlotte Kesl/The Globe and Mail

A key issue in this bitter dispute are a couple of ventures on which Mr. Stronach spent some of that money: Adena Farms and a Florida golf course complex, which became Mr. Stronach’s primary post-Magna pursuits. Over time, he bought 100,000 acres in Ocala, Fla., which he envisioned as the perfect place to raise grass-fed and drug-free cattle for the growing organic food market.

Ms. Stronach has alleged her father lost $800-million with his investments in the agriculture businesses and golf course and she decided in November, 2016, that it was no longer possible to continue funding his schemes. He denied the losses are anywhere on that scale.

He sunk almost $300-million into the cattle business and purchased more land north of the ranch to raise hogs in an area with plenty of acorns to feed on. He also built a private golf course and country club in Ocala, where he planned to develop luxury residences. He had a vision of a farm-to-supermarket business, one he believed would have become profitable within a few years.

“It would have lost monies for the next three or four years, and Belinda says, ‘Look, if it doesn’t make monies, I want to sell it.’ I said to her, ‘No money would have to be transferred from the racing, which has the cash flow.’ [The] agriculture could stand on its own.”

Like the race tracks, his agriculture venture was financially sound because the land was valuable, Mr. Stronach said.

“So, the two businesses I created were real estate-based. The race tracks are 80 per cent and agriculture was 80 per cent real estate,” he said. “Lands don’t depreciate.”

Mr. Stronach is also locked in a battle with his daughter over the lucrative horse racing tracks, which he acquired over a number of years and which generate about $1-billion in annual revenue.

“You know it is all my property, and all of a sudden it is someone else’s. The horses were a labour of love. And somebody else [now] makes decisions. They stole everything. That is what it is,” he said.

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Jockeys and exercise riders take horses out for a morning workout at the Stronach-owned Santa Anita Park race track in Arcadia, Calif.Barbara Davidson/The Globe and Mail

In the interview, Mr. Stronach accused his daughter and Mr. Ossip of “gross negligence,” linking recent thoroughbred fatalities at the family’s Santa Anita Park track in California to poor management. He is convinced that his daughter’s endgame is to sell the race tracks at a hefty profit.

“They wanted to sell the race tracks. It is gross negligence,” he said.

Ms. Stronach has responded with a notice of libel from her lawyers asking her father for an “unequivocal apology and retraction” for alleging that she “deliberately, negligently or otherwise caused the horse fatalities at Santa Anita.”

In her statement to The Globe Friday, Ms. Stronach said: “My father’s allegations concerning Santa Anita Park are simply outrageous and not based on any factual evidence. At The Stronach Group, horse and rider safety is at the core of what we do. California racing will continue to improve with the goal of making Santa Anita Park the safest and best race track in the world. Since the new safety protocols were introduced on March 15th of this year, Santa Anita Park has had 1.86 fatalities per 1,000 starters (5 racing fatalities with 2,684 starters) which is the lowest rate since 2010.”

When he was in charge of the race tracks, Mr. Stronach said, he worked to get the U.S. Congress to adopt a Horse Racing Bill of Rights that would have prevented the overmedication of horses and improved the tracks.

He said his daughter committed to some of the measures only after the recent spate of horse deaths.

What he wants from her is a written commitment that she won’t sell the race tracks. Ms. Stronach recently told The Globe that she had no plans to get out of the profitable business. In an interview in June, she said: “I have looked my father in the eye, on numerous occasions, and said, ‘Dad, we are not selling the race tracks.’”

"But she did not make a [written] commitment – that is the point,” Mr. Stronach said. “If you mean it, why don’t you make a commitment? No, she doesn’t make a commitment.”

Throughout the interview, Mr. Mills interjected and urged Mr. Stronach to be less critical of his daughter, pleading with him to open the door to reconciliation. Two hours into the interview, Mr. Mills left in frustration.

Mr. Stronach said he and his wife have tried to understand why his daughter turned against him. He blames Mr. Ossip and the Acasta debacle.

“I tried to find the reason. I was so close to her. I think she has a lot of pride and she said, ‘Jesus, am I going to be a loser?' So I think she said [to Ossip], ‘If we control the Stronach Group, we can make it up [the losses].’ So I think that is the way it came about,” he said.

The last time he communicated with his daughter was in March. It was a short conversation.

The clock of life is ticking. Mr. Stronach turns 87 in September and he knows the court case could drag on for years.

If he wins, he said, his daughter would lose control of the company, but keep an equal share in the family trust along with him, his wife and son. Andrew Stronach owns a large beef farm in Ontario’s Prince Edward County and has never been an active player in the family businesses.

Mr. Stronach said his shares would be distributed to the three grandchildren when he and his wife pass away.

As part of his succession plan, he wants to lease the family’s racing properties to stakeholders in the thoroughbred business and hire professional managers to run Adena Farms.

“I came to the conclusion that neither my daughter has the ability to run a complex company and neither has my son,” he said. “I just want to see some balance, some harmony in the family.”

He acknowledged, though, that he might not be alive when the courts render a decision.

“Yes, it would be a tragedy. I would like to die in peace. But, on the other hand, I would rather die to be right then die and know I didn’t do the right thing. You can only die in peace if you know you have done the right thing.”

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Christopher Katsarov/The Globe and Mail

Editor’s note: (July 22) A previous version of this story incorrectly described the Magna Golf Club as a 7,300-acre facility. In fact, it is a 7,300-yard course.

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