INM in bid to deal 'knockout blow' to ODCE court application
ODCE concerned INM's affairs conducted in unlawful manner
Independent News & Media (INM) is taking a legal action in a bid to halt the appointment of inspectors to investigate a range of corporate governance issues at the company.
The President of the High Court, Mr Justice Peter Kelly, said that if the country's largest media group succeeds in its judicial review proceedings, it would deal "a knockout blow" to the application by the corporate watchdog for the appointment of inspectors.
The move by INM came as the judge heard the Office of the Director of Corporate Enforcement (ODCE) was concerned the company's affairs had been conducted in "an unlawful manner" and "for an unlawful purpose".
Neil Steen SC, for the ODCE, said there were concerns actions had taken place that were unfairly prejudicial to some shareholders in INM.
The court heard there were also concerns persons connected with the management of INM's affairs had been guilty of misfeasance.
The ODCE fears the range of "potentially unlawful conduct" that may have taken place within the company is "extensive".
Mr Steen said ODCE director Ian Drennan believed there was a "compelling public interest" for inspectors to be appointed.
Yesterday's hearing was initially expected to deal with an application for the appointment of barrister Sean Gillane SC and solicitor Robert Fleck as inspectors with wide-ranging powers of investigation.
However, the court heard INM, which publishes the Irish Independent, filed an affidavit shortly before the hearing opposing that application.
Lawyers for the media group also indicated they wanted a judicial review of the decision by the ODCE to seek the appointment of inspectors.
Mr Drennan wants inspectors to investigate a range of issues, including a major suspected data breach, where IT back-up tapes were provided to a third party service provider on the instructions of then INM chairman Leslie Buckley.
He also wants them to examine concerns voiced in protected disclosures to INM and the ODCE by former INM chief executive Robert Pitt and in a protected disclosure to INM by its chief finance officer Ryan Preston. These concerns related to alleged pressure Mr Buckley brought to bear for INM to pay a higher price than INM's advisers recommended for Newstalk, a radio station owned by INM's major shareholder Denis O'Brien.
Mr Pitt also had concerns over a proposed success fee for a company owned by Mr O'Brien in connection with the sale of INM shares in an Australian media group, APN.
According to his notice of motion, Mr Drennan also wants the inspectors to examine the consideration of the payment of a fee to INM director Paul Connolly in connection with the APN transaction.
It says he also wants the inspectors to look into whether Mr Buckley unlawfully disclosed "inside information" to third parties, including but not limited to Mr O'Brien and his spokesman James Morrissey, within the meaning of EU market abuse regulations between March 2016 and January 2017.
Shane Murphy SC, for INM, said his clients were objecting to the appointment of inspectors, given the impact it would have on the company. Mr Murphy also said INM should have been given notice of the ODCE's intention to seek inspectors, as well as an opportunity to make submissions before the application was brought. The barrister said INM believed its rights to fair procedures and natural and constitutional justice were breached.
He said the company wanted a court order quashing the ODCE decision to seek the appointment of inspectors.
Mr Murphy told Mr Justice Kelly both sides had agreed that a judicial review and the ODCE application could be heard together over three days in May.
However, the judge rejected this idea, saying the judicial review should be held first. He set May 9 as a date for hearing of an application for leave to have such a review. The judge said that if the judicial review was unsuccessful, the application for the appointment of inspectors would be heard at the start of the next legal term, which begins in mid-June.