Irish

Thursday 31 July 2014

Former INM executive settles action over his dismissal

Tim Healy

Published 24/10/2012|05:00

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Independent News and Media (INM) executive Karl Brophy has settled his High Court action against the company over his dismissal from his €300,000-a-year job.

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On the third day of his action for damages and a declaration that the decision to dismiss him was unlawful, his counsel Oisin Quinn told the court the case had been settled following talks.

Brian O'Moore, for INM, said Mr Brophy accepted that the decision to make him redundant was made by INM chief executive Vincent Crowley and that businessman Denis O'Brien, the largest shareholder in INM, had "no hand, act or part in that decision".

In an agreed statement, he said INM confirmed that no allegation of misconduct had ever been made against Mr Brophy and no such allegation was maintained during the proceedings. Ms Justice Mary Laffoy struck out the matter.

In his original injunction proceedings, Mr Brophy claimed Mr O'Brien was behind the decision to dismiss him because of a previous history between the two men and because he had been appointed to the role of director of corporate affairs and content development at INM by the former CEO, Gavin O'Reilly, who stood down with a €1.87m exit package last April.

Evidence

Mr O'Reilly was in court for the announcement of the settlement and to hear part of the evidence given by his successor, Mr Crowley.

Mr Crowley told the court that for some time before his departure, Mr O'Reilly and Mr Brophy were working to try to back up Mr O'Reilly's view that Mr O'Brien had significant non-performing borrowings with the former Anglo Irish Bank and he was therefore effectively funded by the Irish taxpayer (as Anglo had been nationalised).

The two men put a significant amount of time and effort, which was ultimately unsuccessful, into looking into this allegation so that it could be put into the public domain, Mr Crowley said.

The decision to make Mr Brophy redundant was part of a decision by Mr Crowley to effect cost savings in the company, Mr Crowley also said.

These restructuring measures involved the transfer of the company's head office from Citywest in Dublin to Talbot Street in the city centre where editorial and advertising departments are based.

Apart from the printing presses, Citywest was where most of the company's executives were based, along with some financial staff.

Mr Crowley said just days after his appointment he prepared a document in which he listed the staff he felt would be made redundant in the move to Talbot Street. These were Karl Brophy's job and the role of group treasurer.

A further saving was made by the fact that Mr Crowley's previous job as chief operations officer would not be filled.

Mr Crowley said Mr Brophy's appointment was presented by Mr O'Reilly to himself and the then chief financial officer Donal Buggy as a "fait accompli". Normally, such appointments were done on a collaborative basis, he said.

The court heard last week that among the reasons offered by Mr O'Reilly for appointing Mr Brophy was that less money would have to be spent on outside public relations consultants.

Mr Crowley said he now expected significant savings in the company's bill for outside PR consultants, spending around €40,000 per annum during normal times -- although it could be between €80,000 and €100,000 for this year because of all that had been happening.

Plan

Mr Crowley also told the court the move to Talbot Street was actually part of a plan drawn up by Mr O'Reilly, called Project Resolution, with the aim of looking at costs across the entire INM operations because advertising and circulation in Ireland was continuing to drop.

Mr Crowley learned after his appointment that as part of the cost saving measures, Mr O'Reilly had looked at what it would cost to make the position of chief operations officer (Mr Crowley's then job) redundant.

This happened after Mr O'Brien had in July last year written a letter to then INM chairman Brian Hillery calling for a change in INM senior management and suggesting Mr Crowley would be an "ideal replacement" for Mr O'Reilly.

Mr Crowley said he was not aware of Mr O'Brien's recommendation of him, and he was very surprised by it as he had only met him (Mr O'Brien) twice before.

The last time was in 2010 at a Dublin Chamber of Commerce function when Mr O'Brien happened to be passing his table and he introduced the businessman to a number of INM executives. He spoke to Mr O'Brien for about five minutes on that occasion.

The other time he met him was about eight years previously at a social function, he said.

Irish Independent

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