Saturday 25 November 2017

Tensions run high as objectors weigh in with angry words

Members of the NUJ and Siptu protesting outside the EGM. Photo: Mark Condren
Members of the NUJ and Siptu protesting outside the EGM. Photo: Mark Condren
Dearbhail McDonald

Dearbhail McDonald

'The fire exits are located to my left and the door where you came in to my right," began Leslie Buckley, ominously.

The opening remarks of Independent News and Media's chairman at yesterday's extraordinary general meeting of the Dublin and London-listed media company must have been seriously tempting for its sombre-looking board members, including chief executive Robert Pitt.

Mr Buckley and Mr Pitt have been at serious odds over a planned (but abandoned) acquisition of Newstalk, the national radio station owned by businessman Denis O'Brien's Communicorp.

Mr Buckley is a long-term associate of Mr O'Brien who owns a 29.88pc stake in INM.

After pointing out the fire exits, Mr Buckley, who conferred with Mr Pitt several times during the meeting, said he would deal with only questions relevant to the EGM.

It was those "unrelated matters", however, that dominated a stormy and emotional meeting at Dublin's Alexandra Hotel.

Outside, current and former employees protested at controversial plans by INM to stop paying into its defined-benefit pension scheme, a move that will lead to its closure.

Inside, many of those former and serving employee/shareholders voiced their anger at the plan, dismissing Mr Buckley's assertion that two motions enabling a capital reduction and share cancellation - relating to the write-off of €1.1bn of historic losses for INM - were unrelated to the personal pension losses they will now suffer.

The EGM was convened to hold a vote on two resolutions aimed at cleaning up INM's balance sheet and allowing the group to resume paying dividends for the first time since the financial crisis.

But the EGM was overshadowed by the pension protest and the now highly public boardroom row over the Newstalk proposal.

The shareholders' submissions were visceral.

Martin Fitzpatrick, former 'Sunday Independent' deputy business editor, described the pensions move as a "despicable first" and "one of the most shameful corporate deals" in his 50 years as a business journalist. Mr Fitzpatrick added that the motions were entirely relevant to the company's restructuring plan.

Shareholder Giles Kerr, a corporate governance consultant, said he was "dismayed" to read reports about the Newstalk dispute - apparently over what price should be paid for the station - reminding the board that they had to act in the interests of all shareholders.

The raw emotion of the employees in that basement hotel function room was no match for the might of the major shareholders.

These include Mr O'Brien and businessman Dermot Desmond - a 15pc shareholder via his IIU Nominees vehicle - who voted overwhelmingly in favour of the two resolutions.

The resolutions were carried with investors holding 99.88pc of shares in favour of the motions.

A slam-dunk?

Yes.

End of the road?

Unlikely.

For it is inevitable that the capital reduction plan, which requires High Court approval, will be challenged in the courts. Morality, of which we heard much about yesterday, is certainly on the side of the workers.

The law is another matter.

In the UK, a defined benefit deficit becomes a legal debt on a solvent employer and that debt has to be paid to the scheme before the company is wound up.

There is no such protection in Irish law for workers in Ireland's troubled and underfunded defined benefit pension schemes.

Irish Independent

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