Investor adviser monitoring ODCE bid to probe INM
A leading adviser to some of the world's largest investors has said it is monitoring an application by the State's corporate watchdog for the appointment of inspectors to investigate affairs at Independent News and Media (INM).
Glass Lewis, which is known as a proxy adviser, draws up reports on stock market-listed companies and flags issues that might be of concern for shareholders. It has said that investors in INM, which publishes this newspaper and others, should be concerned about developments involving the Office of the Director of Corporate Enforcement (ODCE) as it could impact on the share price.
It is currently recommending that shareholders should vote for all of the directors of INM. But it may revisit this.
"In our view, although legal and regulatory issues are common to many companies, shareholders should be concerned with any type of lawsuit or regulatory investigation involving the company, as such matters could potentially expand in scope and prove to dampen shareholder value.
"As such, in the event that members of management or the board are implicated in any such proceedings, we may consider recommending that shareholders vote against certain directors on that basis. We will continue to monitor these issues going forward."
The other issue raised by Glass Lewis is the scale of the payment made to former CEO Robert Pitt.
He raised a number of concerns with the ODCE about matters at INM, leading to the current investigation. Mr Pitt received a severance payment of €1.5m which included a payment of €239,950 in lieu of notice, according INM's annual report.
"Shareholders should note that we are especially troubled by the large severance payments awarded to the former chief executive, particularly in light of the lack of disclosure surrounding the payment," said the Glass Lewis report.
The High Court will this Wednesday hear a bid by INM to judicially review the ODCE's decision to seek the appointment of inspectors.
The president of the High Court, Mr Justice Peter Kelly, has observed that, if successful in the judicial review, INM would deal "a knockout blow" to the corporate watchdog's application.
In the judicial review proceedings, INM is set to argue it should have been given notice of the ODCE's intention to seek inspectors, as well as an opportunity to make submissions before the application was brought.
INM will also argue its rights to fair procedures and natural and constitutional justice were breached.
In an affidavit filed with the High Court, INM non-executive director Dr Len O'Hagan said the company was not afforded an opportunity to address specific matters which ODCE director Ian Drennan says are a cause of concern.