03/03/2008 1:00AM

De Francis leaves Magna

Email

Joe De Francis, a former co-owner of Pimlico Race Course and Laurel Park, has resigned from the board of directors of the two tracks' parent company, Magna Entertainment Corp., De Francis said Monday.

De Francis said that he planned to send a letter to Magna officials on Monday announcing the resignation. On Friday, during a conference call with analysts to discuss Magna's 2007 results, company officials said that they had asked De Francis to resign. Magna lost $113.8 million last year.

"I was always happy to remain on the board as long as I felt I could make a contribution to the company," De Francis said on Monday. "It's obvious now that my ability to do that will be seriously constrained."

De Francis, his sister, Karin De Francis, and other minority investors sold 51 percent of the two tracks to Magna in 2002. Magna retained an option to purchase the remaining equity, and late last year exercised the option.

After the 2002 transaction, De Francis was named the president of Magna's PariMax unit, which owns and operates several of Magna's technology companies. But after Magna exercised the racetrack purchase option, De Francis was removed from the technology unit while retaining a seat on the Magna board.

The relationship between Magna and De Francis has been strained recently by investor dissatisfaction with Magna's financial performance.

As part of the initial deal, De Francis and the other co-owners retained a right to a large share of profits from any slot-machine operations at the tracks for 20 years. That agreement has come under fire by some Magna investors because of legislation passed last year that would place on the November ballot a referendum to allow slot machines at sites including Laurel Park.

During the Friday conference call, one investor asked Magna officials if they would seek to renegotiate the deal, but Magna would not clearly comment about the possibility.

De Francis declined to comment on the deal or Magna's interest in a new agreement.