New INM chairman admits group does not know financial costs of ongoing, high-profile investigations
Ongoing ODCE and DPC probes
The chairman of Independent News & Media (INM) has admitted the group doesn’t know what the financial cost will be of ongoing probes by the Office of the Director of Corporate Enforcement (ODCE) and the Data Protection Commissioner.
Speaking to reporters after chairing his first annual general meeting (AGM) of INM shareholders, Murdoch MacLennan said the company had not made a specific provision in relation to the investigations – which already include costly court actions.
"We just don’t know how long it's going to last or what it's going to cost. We’re keeping a close watch on it," he said.
Earlier, he told shareholders at the AGM that costs associated with ongoing investigations and of a restructuring of the business will be treated as exceptional charges in the next group income statement.
INM is seeking to prevent the appointment by the High Court of inspectors to look into the affairs of the company after the ODCE applied for inspectors to be appointed, citing concerns on a range of corporate governance issues, including a suspected major data breach.
Murdoch MacLennan said he was "horrified" at the prospect that third parties may have had access to data held by INM for an "improper purpose" as a result of the breach.
Earlier, he told shareholders that INM’s trading performance in the year to date was “in line with market expectations” in a market update ahead of the group’s annual general meeting in Dublin today.
Overall trading held up despite factors including severe storm weather in March which hampered the ability to get newspapers into shops, and higher declines in digital advertising than expected, according to a statement released to the stock exchange.
The high profile probe by the ODCE provided much of the chairman’s focus at the shareholder meeting.
Mr MacLennan said INM had cooperated fully with ODCE requests to date – including responding to 14 requests to hand over books and records, however the group was opposed to the appointment of inspectors to look into the affairs of the company, he said.
INM has appointed Deloitte to review the issues, he said. He reiterated the group’s opposition to inspectors being appointed.
The board had been taken by surprise when the ODCE sought the appointment, via a 240 page court document, he said, but that was: “nothing compared to inspectors coming to live with us for God knows how long”.
“The board believes that it is not in the interests of INM that an inspector would be appointed, and does not believe that the appointment of an inspector would be either justified or proportionate in all the circumstances, particularly given INM’s co-operation with the ODCE and the fact that the Data Protection Commissioner is conducting her own investigation,” his prepared statement to the meeting said.
“The board is, however, gravely concerned that the appointment of an inspector to INM would have a significantly damaging impact on the company and all its stakeholders, including its shareholders, employees, members of its pensions schemes, readers and customers. In considering its legal strategy, the board is acutely conscious that the appointment of inspectors to INM would by necessity result in a very considerable ongoing cost to INM and a continuing requirement to devote substantial resources to dealing with the inspectorate,”
“Let me tell you this: if there was any wrongdoing in the past it was done without the knowledge or approval of the board, and the board is prepared to take such steps as are necessary to protect INM’s interests and to obtain redress from third parties if advised that it is appropriate to do so.”