Tuesday 13 November 2018

ODCE believes searches of INM data went wider than list of 19 people

Independent House in Dublin
Independent House in Dublin
Shane Phelan

Shane Phelan

The corporate watchdog believes searches of data belonging to Independent News & Media (INM) went beyond a search involving a list of 19 people.

The High Court was told there were other “reports” from the so-called “interrogation” of data which the Office of the Director of Corporate Enforcement (ODCE) had been unable to open, even with the assistance of IT experts, as they were password protected.

“There was clearly other analysis done which we have been unable to access,” ODCE counsel Brian Murray SC told the court.

He made the remarks as the ODCE opened its application for the appointment of inspectors to INM.

It wants the inspectors to investigate a range of corporate governance issues at the country’s largest media group, including the major suspected data breach in 2014.

Mr Murray outlined how INM’s data tapes were given to an external company TDS UK on the authorisation of then INM chairman Leslie Buckley in 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, contained in an email sent by Robert Breen, chief operating officer of TDS, detailed the names of 19 people.

These included four journalists, two barristers who had worked on a tribunal of inquiry, former staff and directors of INM, and people associated with a 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 INM’s largest shareholder, Denis O’Brien.

Mr Buckley was Mr O’Brien’s nominee to the INM board.

Mr Murray described how, in a letter to Mr Buckley, solicitors for INM described the 19 people 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 beneficially 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.

Mr Murray said there were three common factors in all of the issues of concern for the ODCE.

These were Mr Buckley, Mr O’Brien, and “an apparent benefit for the latter”.

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 the board might 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” and why did the board not know what he was doing.

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.

Mr Murray brought the court through concerns raised in protected disclosures by Mr Pitt and INM’s chief finance officer Ryan Preston.

These included concerns about pressure Mr Buckley is alleged to have brought to bear for INM to pay a higher price than INM’s advisors recommended for Newstalk, a radio station owned by Mr 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 Australian media group APN in 2015.

The court was told a request from Island Capital, a company owned by Mr O’Brien, for a fee in connection with the APN deal was withdrawn after Mr Pitt obtained legal and financial advice that it would have to be disclosed.

Similarly, a request for the payment of a fee to then INM director Paul Connolly was not pursued after the advice on disclosure was obtained.

Mr Murray said Mr Pitt did not believe Island Capital did work warranting a fee, but did accept Mr Connolly had facilitated the transaction and had added value for INM.

He said independent reviewers hired by INM had been told by then senior independent director Jerome Kennedy that Island Capital had worked on the deal. The reviewers accepted this in their report.

But the barrister said no documents were produced to support a payment request.

Mr Murray said the board set up a committee to investigate Mr Pitt’s concerns in relation to Newstalk.

Again Mr Buckley was believed, said Mr Murray.

The hearing continues.

Read more here:

Watchdog's bid to appoint inspectors to INM gets underway in High Court

Judge allows data watchdog to use court papers in INM probe

Court allows Data Protection Commissioner to use ODCE papers in INM data breach inquiry

Former CEO to get papers on suspected data breach at INM 

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