Stakes sky-high for all parties as ODCE seeks High Court inspectors to probe INM
The decision by the Office of the Director of Corporate Enforcement to seek High Court inspectors to investigate the affairs of Independent News and Media is a drama that is reaching fever pitch even after the two protagonists have departed.
The corporate law watchdog's inquiry into INM, the country's largest media group and publishers of the Irish Independent, began when INM's former CEO, Robert Pitt, made a protected disclosure to the ODCE.
Mr Pitt made a complaint under new whistleblowing legislation in late 2016 after a high-profile dispute with former chairman Leslie Buckley over a potential bid by INM to buy Newstalk.
The radio station is part of the Communicorp Group owned by businessman Denis O'Brien, INM's biggest single shareholder and a long-time business associate of Mr Buckley who stepped down as INM chairman this month.
INM, which initiated its own independent review in December 2016 into the affair, has always insisted the discussions over the aborted acquisition ended at a preliminary stage and was never considered by the board which now boasts a new chairman (Murdoch MacLennan) and three new non-executive directors.
The row between Mr Pitt and Mr Buckley reportedly related to the price to be paid for Newstalk and prompted requests by the ODCE for records in relation to the planned acquisition.
It escalated in recent months when the ODCE's investigation widened into the handling of a potential personal data breach at the company. And it peaked again in February when the High Court ruled on a dispute between the ODCE and Mr Buckley over claims of privilege (confidentiality) the latter asserted over certain documents.
In that instance, High Court President Mr Justice Peter Kelly (who will decide whether High Court inspectors should be sent into 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.
In light of the ODCE's latest court move, executed last Friday on the final day of the legal term, was that victory a pyrrhic one for Mr Buckley and, consequently, for INM?
The appointment of High Court inspectors are rare and potentially devastating for any company subjected to the process. Inspectors have extensive High Court style powers, including the power to take witness statements from key personnel and to order the production of documents, with severe sanctions for non co-operation in this regard.
The appointment of an inspector will not interfere with the day-to-day executive management of a firm.
But it is distressing for employees at all levels of the organisation and it can add significant legal and related costs to a company's bottom line - no doubt why INM issued a swift, market sensitive statement late last Saturday night.
The scrutiny will fall on corporate governance issues. The editorial independence of the various media brands is separate and fiercely guarded by the editors and journalistic teams.
A cloud hangs over the corporate part of the company until the inspector's report is completed and published, if at all.
We are somewhat in the dark until the grounds outlining the ODCE's rationale for the appointment of inspectors are disclosed in the latest court proceedings. But there is no doubt that this is a serious situation for INM to find itself in.
It's mission critical stuff, too, for the ODCE, which is reeling from the fallout of its extraordinary misconduct in the investigation of former Anglo Irish Bank chairman Sean FitzPatrick.
At an as yet untallied cost to taxpayers (but likely to run into tens of millions of euro) Mr Fitzpatrick was acquitted after three trials on all counts over his alleged failure to disclose personal loans to Anglo's auditors.
The trial collapsed after it emerged that witnesses were coached during the ODCE investigation, evidence was contaminated and the ODCE's then lead investigator had shredded documents.
The ODCE's investigation, described by trial judge John Aylmer as "inappropriately biased and partisan", led to the collapse (at 126 days) in May 2017 of the longest running and most expensive criminal law trial in history.
The ODCE, with its new chief Ian Drennan, insists it is substantially changed.
For its part, INM is seeking a fresh start with a new strategy for the company and its shareholders.
Make no mistake: for all the actors in this drama, the stakes - and the scrutiny - are at an all-time high.