Friday 20 July 2018

Watchdog believes more searches were carried out on INM data files

Former INM chairman Leslie Buckley: the ODCE claims he put senior executives under pressure to pay an inflated price for Newstalk radio station. Photo: Steve Humphreys
Former INM chairman Leslie Buckley: the ODCE claims he put senior executives under pressure to pay an inflated price for Newstalk radio station. Photo: Steve Humphreys
Shane Phelan

Shane Phelan

The corporate watchdog believes the major data breach at Independent News & Media (INM) went beyond a search involving a much-publicised list of 19 people.

Earlier this year, it was revealed the Office of the Director of Corporate Enforcement (ODCE) uncovered a document suggesting 19 names, including those of high-profile journalists Brendan O'Connor and Sam Smyth, were used during searches of INM's IT back-up tapes by an external company.

Mr Buckley's successor, Murdoch MacLennan. Photo: Steve Humphreys
Mr Buckley's successor, Murdoch MacLennan. Photo: Steve Humphreys

But the High Court was told yesterday there were other "reports" from the so-called "interrogation" of data.

The ODCE had been unable to open these, even with the assistance of IT experts, as they are password protected.

"There was clearly other analysis done which we have been unable to access," said ODCE counsel Brian Murray.

He made the comments as the corporate watchdog opened its application for the appointment of inspectors to the country's largest media group.

Independent director Len O'Hagan attended the hearing
Independent director Len O'Hagan attended the hearing

It wants the inspectors to investigate a range of corporate governance issues, including the data interrogation and claims senior INM executives came under pressure from then chairman Leslie Buckley to pay an inflated price for Newstalk, a radio station owned by INM's largest shareholder, businessman Denis O'Brien.

Mr Murray said the aborted Newstalk deal was "an attempt to convey advantage" to Mr O'Brien and could only have happened if there was "a fundamental malaise" at INM. He also suggested there had been a culture of deference towards Mr O'Brien and his nominee on the INM board, Mr Buckley.

INM is opposing the application on the grounds it is unwarranted and will damage the company.

Mr Buckley's successor as chairman, Murdoch MacLennan, and senior independent director Len O'Hagan were in court for the hearing, which is expected to last three days.

Mr Murray outlined how INM's data tapes were given to an external company, TDS UK, on the authorisation of Mr Buckley in October 2014.

He said Mr Buckley had claimed this was done as part of a "cost-reduction exercise", where he was looking for details of a contract INM had with solicitor Simon McAleese.

But Mr Murray said: "We now know the data was searched for persons who have no obvious relevance to Mr McAleese's contract."

The barrister told the court that a "report" of one search, discovered in an email uncovered by the ODCE, detailed the names of 19 people. These included four journalists, two barristers, former staff and directors of INM, and staff at strategic communications firm FTI Consulting. There was also an employee of telecommunications firm Cable and Wireless, which Mr Murray said was a competitor of Digicel, a company founded by Mr O'Brien.

Mr Murray described how, in a letter to Mr Buckley, solicitors for INM described those on the list as people who might in some way have acted adversely against Mr O'Brien. He also said bills for the data interrogation had been paid for by Blaydon, a company owned by Mr O'Brien.

The barrister said that while the ODCE wanted inspectors to examine a range of issues, the data breach on its own warranted the appointment of inspectors.

He said there were three common factors in all of the issues of concern.

These were Mr Buckley, Mr O'Brien and an action or proposal to confer an advantage on Mr O'Brien at the expense of the company as a whole.

Mr Murray said INM's position was that if the matters alleged were true, then it was "intentionally misled" by Mr Buckley. But he said the fact INM's board appeared to have been "hoodwinked" raised the prospect that it may have been misled in other ways too.

The barrister said that if some or all of these events did occur, how could a chairman be put in a position of such "untrammelled authority".

When the board did learn of the data issue, it asked Mr Buckley for his account and was "very willing indeed" to accept it in preference to an account given by former INM chief executive Robert Pitt, he said.

Mr Murray said the board set up a committee to investigate concerns Mr Pitt expressed about the proposed Newstalk deal. Again Mr Buckley was believed, said Mr Murray.

Irish Independent

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