Thursday 21 June 2018

INM to pursue 'wrongdoers' for cost of ODCE inquiry into corporate governance

Independent News & Media chief executive Michael Doorly. Photo: Frank Mc Grath
Independent News & Media chief executive Michael Doorly. Photo: Frank Mc Grath
Shane Phelan

Shane Phelan

Independent News & Media (INM) plans to pursue other parties for its legal costs should wrongdoing be proven as part of an investigation into a range of corporate governance issues at the company.

INM could face substantial costs if the State's corporate watchdog succeeds in an application to the High Court for the appointment of inspectors to the company next week.

Finance Minister Paschal Donohoe said yesterday he shared concerns expressed by Taoiseach Leo Varadkar about a suspected data breach at the company.

Mr Donohoe said the independence of journalists was "of the highest level of importance for good democracy".

The Office of the Director of Corporate Enforcement (ODCE) wants inspectors to investigate the suspected data breach, during which it is feared data relating to journalists, former board members and staff, as well as other individuals, was "interrogated" by outside companies. In a statement to the stock exchange this week, INM said IT back-up tapes, containing back-up copies of electronic data stored on the company's servers, were provided to a third party service provider on the instructions of then INM chairman Leslie Buckley in 2014.

Mr Buckley stepped down from INM's board last month.

The ODCE also wants inspectors to examine issues relating to INM's proposed purchase of Newstalk and to investigate whether "inside information" was unlawfully disclosed to third parties in breach of EU market abuse regulations.

At a meeting with staff yesterday, INM chief executive Michael Doorly was asked if the company was looking at a mechanism to recover its costs from wrongdoers should wrongdoing be proven.

"If there is wrongdoing every mechanism under law will be pursued to recover those costs," Mr Doorly responded.

The comments came as the INM Editor-In-Chief Stephen Rae informed staff of a number of initiatives to safeguard against unauthorised access to the data of journalists.

These include the appointment of external experts to examine governance of editorial data. A "triple-lock" mechanism will also be introduced where approval will be needed from three senior executives if any editorial employee's data is to be accessed by the company. There are rare circumstances where this may be necessary, such as in the defence of litigation or complying with court orders.

"These are amongst the first steps we are taking to address the issues that have arisen in the last few weeks," he announced to staff.

INM publishes the Irish Independent, 'Sunday Independent', 'Sunday World' and 'The Herald', all of which are based on Dublin's Talbot Street, as well as a number of regional titles and the 'Belfast Telegraph'.

It is understood the suspected data breach is confined to some of the Talbot Street titles and does not involve other INM titles. It is also believed the private email accounts of employees, such as Gmails, were not accessed.

Mr Buckley has told the ODCE the data interrogation was related a "cost reduction exercise" during which information about a professional services contract was sought.

However, INM's statement to the stock exchange said ODCE correspondence suggested the data may have been "searched more extensively and for a different purpose". Mr Buckley declined to comment, but has previously said he plans to robustly defend his position.

According to an affidavit filed by the ODCE, invoices associated with the data interrogation were discharged by Blaydon Limited, a company owned by Denis O'Brien, INM's largest shareholder. Mr O'Brien has yet to comment.

Irish Independent

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