ODCE focus on access to data and information in INM probe
THE Office of the Director of Corporate Enforcement wants High Court inspectors to investigate whether several companies had access to Independent News & Media's information-technology systems following a suspected data breach at the company in late 2014.
The Irish Independent has also learned that Ireland's corporate law enforcer is seeking to appoint inspectors to find out if any confidential information was disclosed to third parties in breach of EU-wide market-abuse regulations.
The Office of the Director of Corporate Enforcement (ODCE) made the dramatic move to seek the appointment of High Court inspectors last Friday, prompting an emergency meeting of the board of Independent News & Media (INM) on Saturday afternoon.
Yesterday, shares in INM - Ireland's largest media company - closed down 5.1pc pc to 9c.
It is understood the ODCE has submitted an affidavit (court statement), running to several hundred pages, in support of its application to have inspectors appointed to INM.
INM - which publishes the Irish Independent, 'Sunday Independent' and independent.ie - issued a statement late last Saturday night and again yesterday morning warning that the appointment of inspectors could result in the company incurring material costs.
The ODCE has been investigating the company since late 2016, when former CEO Robert Pitt made a protected disclosure under whistle-blowing legislation to the agency following a high-profile dispute with the then chairman, Leslie Buckley, over the potential acquisition by INM of Newstalk radio station.
Newstalk is wholly owned by Mr O'Brien's Communicorp Group.
Mr O'Brien, INM's largest single shareholder, is a long-term business associate of Mr Buckley, who stepped down as INM chairman earlier this month.
The ODCE's application, which may be consented to or resisted in whole or part by INM, will be heard next month.
"The Board of INM is taking legal advice as to whether the Court would have sufficient grounds to make the appointment," the company said yesterday in a notice to the stock market.
The row between Mr Pitt and Mr Buckley reportedly related to the price to be paid for Newstalk. Mr Pitt's disclosure prompted requests by the ODCE for records in relation to the planned acquisition.
The situation escalated in recent months, when the ODCE's investigation widened into the handling of a potential personal data breach at the company.
Last February, the High Court ruled on a dispute between the ODCE and Mr Buckley over claims of privilege (confidentiality) Mr Buckley asserted over certain documents.
High Court President Mr Justice Peter Kelly, who will decide whether High Court inspectors should be appointed to INM, ruled that Mr Buckley was entitled to assert privilege over 10 of 11 documents because they concerned preparation of Mr Buckley's response to the ODCE's requirements.
INM, which initiated its own independent review in December 2016 into the Newstalk affair, has always insisted the discussions over the aborted acquisition ended at a preliminary stage and it was never considered by the board.
INM now has a new chairman, Murdoch MacLennan - CEO of the Telegraph Media Group from 2004 until 2017 - and three new non-executive directors.
The ODCE, led by Director Ian Drennan, will apply to the High Court under section 748 of the Companies Act 2014 for the appointment of inspectors.
INM has been informed that the ODCE will make an application to the Court for the appointment on April 16.
Last night, INM declined to comment.
Meanwhile, the ODCE said it cannot comment on individual cases.
A representative for Mr Buckley said: "It is not appropriate to comment on matters related to an ongoing review process."
Under section 748 of the Companies Act 2014, the Court may appoint an inspector to investigate the affairs of a company, and to report on those affairs to the Court, if the Court is satisfied that there are circumstances suggesting that the affairs of the Company have been conducted in an unlawful manner or on certain other specified grounds.