Osborne and Buggy voted off INM board at shareholders' meeting
INM Chairman James Osborne and Chief Financial Officer Donal Buggy have been voted off the board of Independent News & Media (INM).
The two senior board members were voted off after a tetchy shareholders' meeting yesterday. Some 222 million votes out of 374.5 million went against the re-election of Mr Osborne, with 219 million votes going against the re-election of Mr Buggy.
In his opening remarks, Mr Osborne said it was his first and may be his last annual general meeting.
He later noted that Denis O'Brien had voted against him and said this meant he would leave the board.
However, shareholders voted to reappoint Paul Connolly to the board. Mr Connolly, who is a representative of INM's biggest shareholder Denis O'Brien, is currently taking a legal action against Independent News & Media over the exit package of €1.87m which was paid to former INM chief executive Gavin O'Reilly.
Because of this, the company's board had asked shareholders not to support Mr Connolly's reappointment.
In a statement yesterday, Mr Connolly said that shareholders had strongly backed his re-election to the board, despite a recommendation urging them not to do so.
He said he was "very grateful" for the level of support shown to him from across the whole shareholder base and looked forward to supporting the new chief executive and his management team in creating a new and stronger INM.
Earlier, Mr O'Brien called for "urgent, radical re-structuring" at the company.
"I believe it is of the utmost importance for the company, its shareholders, its employees and its assets, that urgent, radical re-structuring is undertaken immediately," solicitor Owen O'Connell said in a prepared statement read out at Dublin's Citywest on behalf of Mr O'Brien, who holds 29.9pc of INM's shares.
"The confidence of the market has been lost and this can only be regained by a convincing and cohesive reconstruction of the company -- including its leadership. Lack of leadership has cost the company dearly over many years."
He said one of the most disturbing developments at the company was the scale of the pension deficit, which is approximately €148m. "I sympathise with all current and future pensioners who have the worry and uncertain future," he added.
While calling for change, Mr O'Brien emphasised his support for INM chief executive Vincent Crowley, who replaced Gavin O'Reilly earlier this year.
"The new chief executive Vincent Crowley has my total confidence," Mr O'Brien's statement added.
John Bateson, a spokesman for Dermot Desmond, who holds a 6.36pc stake in INM, said the financier would vote against the re-election of all directors except Paul Connolly. He said he had "strong views" on Mr O'Reilly's termination package, which he described as "excessive" and without justification.
He rejected chairman James Osborne's recommendation to vote against Mr Connolly's reappointment to the board.
Mr Crowley said the company was "resilient and profitable".
"INM had delivered operating profit of €75.5m and an EBITDA outcome of just over €100m against a difficult backdrop. A continuing focus on maximising available cash, from a well-invested base, delivered net debt reduction of circa €47m or some 10pc," he said.
He added that he was pleased to report digital revenue growth of 10pc for 2011, while so far this year, digital revenue had risen 17.6pc.
He said the outlook remains unchanged from the outlook released last month where the company said forecasting in the current climate is very difficult while advertising conditions remain challenging and erratic.
He also confirmed the closure of the company's London office and the head office in Dublin and added that the 'Sunday World' redundancy scheme was fully subscribed.
Meanwhile, senior counsel for INM told the Commercial Court yesterday that the board of INM was within its legal rights to make a €1.87m payment to Mr O'Reilly to secure his agreement to stand down as CEO. But lawyers for a non-executive director of INM, who has brought a legal challenge to the payment, said the law is clear that payments of this type are prohibited.
The arguments were made on the final day of an action by Paul Connolly who says the payment should first have been put to a general meeting of shareholders in accordance with Section 186 of the Companies Act 1963. He sought declarations from the court that the payment was unlawful.
Mr Justice Brian McGovern reserved his decision.