Monday 27 May 2019

INM says there is no basis for claim of culture of deference towards O'Brien

INM’s largest shareholder Denis O’Brien. Photo: PA
INM’s largest shareholder Denis O’Brien. Photo: PA
Shane Phelan

Shane Phelan

Independent News & Media (INM) has rejected a suggestion by the corporate watchdog that a "culture of deference" existed in the company towards its largest shareholder Denis O'Brien.

INM has also rejected a suggestion by the Office of the Director of Corporate Enforcement (ODCE) that former chairman Leslie Buckley, who was a nominee of Mr O'Brien, had "untrammelled authority" within the media group.

Paul Gallagher SC, for INM, told the High Court there was no basis for the assertions.

Mr Gallagher was speaking during the second day of an application by the ODCE for inspectors to be appointed to the country's largest media group to investigate a range of corporate governance concerns.

Mr Buckley is central to several matters, including a major suspected data breach in 2014 and claims senior INM executives came under pressure to pay an inflated price for Newstalk, a radio station owned by Mr O'Brien, in 2016.

The ODCE also has concerns about a proposal to pay a fee of €1m to Island Capital, a company owned by Mr O'Brien, for work related to the sale of INM's shares in Australian media group APN in 2015.

Former INM chairman Leslie Buckley. Photo: Steve Humphreys
Former INM chairman Leslie Buckley. Photo: Steve Humphreys

Ultimately, the Newstalk deal did not go ahead and no fee was paid to Island Capital.

INM is opposing the application, which it says is unwarranted and will have a damaging impact on the company.

Mr Gallagher told the President of the High Court, Mr Justice Peter Kelly, that INM had a board of very experienced directors who were people of "unimpeachable integrity".

INM, he said, had taken various actions which were "far from a culture of deference".

These included the setting up of an independent review to examine allegations made by former INM chief executive Robert Pitt about the aborted Newstalk deal and other matters.

The media group had also publicly announced it had issued legal proceedings against Mr Buckley, he said.

The court heard the data breach issue is already being investigated by the Data Protection Commissioner (DPC) and that the Central Bank is considering investigating another matter raised by the ODCE - concerns "inside information" was shared with Mr O'Brien by Mr Buckley.

Neil Steen SC, for the ODCE, said INM had asked that if inspectors are appointed, their remit should be "tightly drawn" and should, at a minimum, not overlap with the DPC or the Central Bank.

But he said the nature of an investigation was to look into things that were not fully known.

"Therefore the proposition that the investigation be tightly drawn cannot be justified," he said.

However, Mr Gallagher said the ODCE had fallen short of meeting the requirements for the appointment of inspectors.

Mr Gallagher also criticised the manner in which the ODCE had conducted its investigation.

He said it had kept key evidence about the data breach from INM.

This was a reference to a spreadsheet discovered by the ODCE, which suggests the names of 19 people, including journalists, barristers and former INM executives and directors, was used to search data that was taken abroad for analysis by an outside firm.

The data interrogation was authorised by Mr Buckley and invoices related to it were discharged by a company owned by Mr O'Brien. Mr Buckley has denied any wrongdoing.

Mr Gallagher said the ODCE discovered the spreadsheet in October 2017, but did not inform the company until the proceedings seeking the appointment of inspectors were issued last March. He said that if the ODCE was concerned about a supposed culture of deference and untrammelled authority, it allowed this to continue for a period of six months after discovering the document.

Mr Gallagher also said the ODCE had claimed inspectors were required as it had brought matters as far as it could under its existing powers.

He said what was remarkable about this claim was that there were many matters not pursued by the ODCE under its existing powers.

"A vast number of people and a vast quantity of information was not pursued," he said.

The hearing continues today.

Irish Independent

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