AH: In a recent edition of The Irish Times, columnist John McManus asked if any explanation would be offered at the EGM on August 27 "on the chaos that preceded the appointments of the four new directors and in particular the extraordinary behaviour of Paul Connolly in the boardroom coup that saw Gavin O'Reilly and James Osborne ousted, sparking a wave of non-executive departures". Do you think explanations will be forthcoming?
JO: No, I don't.
AH: Should they be demanded?
JO: I would have thought the action by Paul Connolly was most unusual. It cost the company a lot of money, how much money I don't know but two senior counsel, one junior, at least two partners of McCann Fitzgerald -- that's hundreds of thousands and they got nothing for it. Nothing.
It also cost the State a lot of money. There was Court No 16, and Judge Brian McGovern for three days. Then Judge McGovern spent, I would guess another three days, writing the judgement, which he had in his hand when he declared that, like the third secret of Fatima, it would now never be disclosed. So that's an awful waste of taxpayers' money.
So no, I don't believe there'll be any explanation whatsoever. But I do find it pretty strange. I was told, I can't tell you by whom, that the company was advised they had a 70 per cent chance of success. Seventy per cent in legal parlance is huge. It's normally 50/50, or 60/40. You very rarely hear 70/30. You were the first person to text me with the result. I was on my way back from Monaghan -- and I thought to myself: "Why would the company, if it was successful in the action, and it was going to get its costs from Paul Connolly, why would it settle?"
AH: What do you think was the very important issue that Paul Connolly said prompted him to take the High Court action to challenge the Gavin O'Reilly payoff?
JO: There's only two answers to that I suppose.
One is a point on which lawyers have pontificated -- and charged fees for -- since the Seventies: whether or not shareholders' consent is required to pay compensation to a chief executive who has been dismissed. The law is a little unclear, and there's never been a judgement on it. So there were a lot of lawyers extremely interested. That could be one interpretation of the issue -- a genuine desire to have the issue put in front of shareholders -- although in the court case Paul Connolly made it quite clear that there was no question of getting money back from Gavin O'Reilly.
The other interpretation is that the action was brought in order to get rid of me.
AH: To get rid of you?
AH: And is that the reason for the 11th-hour withdrawal of the action, the abandonment of the challenge?
JO: I can only assume that the Connolly side felt that they were the 30 per cent camp and not the 70 per cent camp. But what was going to happen if Judge Brian McGovern came out and said that the company did the right thing and got the right legal advice and complied with the law? What was Paul Connolly going to do then? In normal circumstances he would have had to resign. He was on the board of a public company. He sued the public company. He was unsuccessful. If that had happened, in normal circumstances maybe he should have resigned if he had lost the action. But that was the whole point -- this isn't normal circumstances.
AH: It was a rather circuitous route to force you out.
JO: Very. And completely denied by them. When I heard of the prospective action by way of email, I actually rang Paul Connolly and I said, "Paul you may as well put my head in the noose, that's what you've done". He said, "No, it's nothing to do with you. This isn't an attack on you. This is an attack on the amount of the payment, on Gavin O'Reilly, on Baroness Jay, not against you." I said, "That's nonsense. I'm chairman of this company and you're suing the company. I consider myself to be independent. So of course it's an attack on me." And it turned out to be an attack on me.
You could describe it as corporate democracy.
AH: But was the withdrawal of the action at the 11th hour -- was that corporate democracy?
JO: I don't believe so. AH: And you have a figure in your mind of how much this action cost the company?
JO: A few hundred thousand.
AH: And it cost the State the same?
JO: Well, yes, depends how much it costs to run Court 16 for three days and the judge for another three days, I don't know how you break that down, but it cost the State a lot of money, it clogged up the court system.
AH: The Sunday Times published a story about a massive and costly surveillance operation on Gavin O'Reilly -- did you feel at any stage that you were under surveillance?
JO: No, but as some people would tell you -- I'm naive. I don't spend my life thinking I'm under surveillance. You know what, if somebody put me under surveillance they would be so bored. I live a very ordinary, kind of tedious, very pleasant life. They'd watch me meander down into Ranelagh, probably popping into Paddy Power, have a €10 bet and then going for a pint.
AH: But they might hope to find you meeting somebody.
JO: Well, Phoenix made the statement that I met Michael McDowell in Ranelagh. I actually wrote to them saying, I never met Michael McDowell, either professionally or socially.
AH: As did he.
JO: Oh he did too, did he? I know what he looks like and I think he knows what I look like but I've never actually said "hello" to him. So people might have thought I was scurrying around meeting politicians.
AH: On the subject of the make-up of the board, which presumably will be completed at the EGM, just how independent do you think this board will be? JO: I honestly don't know, I knew you'd ask me the question. I honestly don't know, and INM is a company that is not particularly independent because the banks have such a grasp over it.
AH: But that's not what you meant when you said, "This concludes the AGM of Not Independent News & Media".
JO: No, it wasn't. And here you have to kind of differentiate between what I would describe as corporate democracy because shareholders can vote as they want to vote, that's their privilege. It isn't one man, one vote, it's one share, one vote. How independent -- we'll see. I think I took an independent view on things. I don't think I was either pro-O'Reilly or pro-O'Brien, or anti O'Reilly or anti-O'Brien. I took a view on what needed to be done in the business and I believe that was the right view. It was quite difficult to persuade some of my directors that this was the right thing to do but as to how independent they will be, we will wait and see.
I hope they're independent because one thing I feel very strongly about is that the press needs to be independent. And people may say "Well you're very naive", and that may be so, but I do think from a national point of view it's important that there is an independent media and it is not controlled by any particular people. I think that's just part of democracy.
AH: Absolutely. So therefore were you ever put under any pressure by Denis O'Brien to exert press-ure in relation to any story?
JO: As you know -- as you wrote in your paper on April 7, which was a Saturday, at about one o'clock I got a call from Denis. And I know Denis's representative -- or whoever -- has denied that the call took place, but if he denies that the call took place that is a straight forward lie. The call took place, I've no doubt about that, where he started off by referring to your paper the previous Sunday -- do you know how many times the name Denis O'Brien was published in that paper?
I actually went through the paper that Sunday and said I don't believe this, this is extraordinary. So I had a conversation about that. I said I completely understood why he was upset, why his family was upset, I totally understood all that and then he said "they've been on to me, there's an article in tomorrow's paper and I want it withdrawn" -- and I said "I'm sorry, not me. I'm an independent non-executive chairman and I'm not doing that, I'm not going to interfere in an editorial", and we had an argument about it. Eventually I said to him: "I don't want to fall out with you Denis. You're a big shareholder in INM and in three seconds I'm hanging up."
And as you said, that was probably my Waterloo. It probably was. Was I right to do that? From a personal point of view I'm not sure, but I do feel that it was the right thing to do (at that stage he was a 22 per cent shareholder -- he has subsequently increased his stake.) He was putting a non-executive chairman -- me -- in an almost impossible situation.
I mean could you imagine if I had rung you up, at that stage I had only met you at your husband's funeral, and said: "Hello, I'm your chairman," -- you must be thrilled to get this call on a Saturday afternoon -- "There's an article about Denis O'Brien which was about the 13 biggest borrowers in Anglo, I want it out." Actually the article was innocuous, there was nothing in it.
AH: Very fair to him actually.
JO: Very fair, now in fairness to him -- his PR person was getting a lot of questions about borrowings from Anglo -- he didn't know what the article would say, but I think even if I had rung an editor, he (or she) would have been inclined to say, "Who does he think he is?", and I think he would be justified in saying it, because I'm not there to run the editorial of the newspaper; I am there to make sure the newspapers sell, that they maintain the standard and that the company makes money and is properly run and has the proper management and I think I'm there actually to have some input into who the key appointments in the business are, but I'm not there to decide whether you write an article about Sean Quinn, Denis O'Brien or whoever else. That's not my job. So that was the only episode of this nature.
AH: Did you note it?
JO: I did, I did file it, I kind of file those important issues, things like that.
AH: I also know you told people about it contemporaneously.
JO: I did, because I thought it was quite extraordinary. I told board members and said this is what happened and this was my reaction.
AH: Do you think that there is any concern in political parties to INM's ownership base at the moment?
JO: Well the answer to that question is No. But maybe there should be. You read in the papers that there seems to be some sort of departmental dispute as to whether it's Richard Bruton's area or Pat Rabbitte's area? If the Cabinet really looked upon these things seriously they should be able to sort out the jurisdictional debate.
AH: But there's an undoubtedly growing influence of Denis O'Brien in INM.
JO: There are only two things that you can point to. One concerns my removal, but that's corporate democracy -- he does have 29.9 per cent of the votes and he's entitled to vote as he wishes.
AH: Do you think the Broadcasting Authority of Ireland was justified in saying that he did not control INM?
JO: Which brings me to the second point.
I made it perfectly clear to Paul Connolly that if he lost his litigation against INM, then INM would be suing for the costs. I said: "I don't have any choice, you lose litigation and the effect of losing litigation is: you pay the costs. I have to because it's shareholders' money. I'm quite puritanical about these things."
You could put forward an argument that, whatever the result, it was going to be embarrassing for the board of INM, so why don't we settle. If I'd been there you would have been very hard-pressed to convince me that that was the right decision. I had said to Paul if the court goes against you I'm coming after the costs. I don't know what the future holds, I hope it will be independent. I hope it will be truly independent.
AH: Do you feel you were stabbed in the front or the back?
JO: I am sure I wasn't stabbed in the front. If somebody is stabbing you in the front you can see who they are.
AH: Dermot Desmond did tell you?
JO: Yeah, he was six per cent. If Denis O'Brien hadn't voted, had abstained, I was fine. And I had no communication from Denis O'Brien, from Paul Connolly, from Lucy Gaffney. None whatsoever.
AH: And since that day, since June 8?
JO: Not a word has been spoken.
AH: Does that surprise you?
JO: No -- would it surprise you? No and you know this is not the happiest investment Denis O'Brien has made. It has been remarkably unsuccessful so I can see why he doesn't spend much time. In fact, he probably is more interested in trying to sell mobile phones to Burma.
AH: Given, though, that he is certainly a major influence in INM now, what do you think of his penchant for threatening to sue journalists personally?
JO: Has he sued you?
AH: No he hasn't. Before he threatened to sue Vincent Browne, in the 10 years prior to that, 17 journalists received legal letters from him. Now obviously it's 18.
JO: I think it wouldn't matter how many newspapers Denis owned, or how many radio stations or television stations that he had, people have their view about Denis O'Brien and they're entitled to that, the same way that people have their views about Sean Quinn etc. I don't think people's views will change dramatically, so suing all these journalists, do you suddenly think that is going to make them write different kinds of articles? They might just be a bit nervous about what they write.
AH: Is it a question of temperament and taste? You said at the beginning of the interview that there are proprietors for growth and there are proprietors for battening down the hatches?
JO: Well there's managements more than proprietors.
AH: Right, but even for proprietors there is certainly, I think, a personality type which probably would find the whole idea of owning something but having to keep their hands off quite difficult.
JO: Yeah, but that doesn't quite interconnect with suing all the journalists.
AH: The problem is, his reputation was not created by journalists. His reputation is based on Mr Justice Moriarty's findings and unless he challenges those in court there's nothing going to change about that because that reputation is there.
JO: It's probably very costly.
AH: You were chairman of companies other than INM. How would governance at INM compare with, say, Eason?
JO: It's good. As you know I am on the board of Ryanair and I think it's a really well-run business and the corporate governance is perfectly adequate. There's very close contact between Michael O'Leary and the chairman and the directors. David Bonderman has been chairman of Ryanair for 16 years -- far longer than Mr Hicks says he should be, but if you read the Ryanair report you see we're very lucky to have David Bonderman as chairman and that's the way it's going to be.
AH: How long are you there?
JO: I wouldn't dare put it on tape!
AH: Well on the tape I'd like to say it's such a pity that you are no longer chairman.
JO: Oh thank you, I appreciate that. The irony of my removal is that after four months on the job, both of Denis's nominees said you've achieved more in four months than was achieved in the previous four years. (Note: after the interview James Osborne rang to say he found a text sent by Leslie Buckley on the day Gavin O'Reilly resigned, saying: "Congrats. Well done.")
There's a job of work to be done and I was looking forward to it. If Jerome Kennedy is chairman -- I don't know the other people so I'm not passing comment -- I think he will do a good job.
It's a really tough sector, it's brutal and it's not going to get better. Even with online I personally believe there will always be newspapers and it isn't only because I'm north of 60 that I like reading newspapers.
AH: Eight out of 10 Irish people still read newspapers and they spend six hours a week reading them so that is a much more sanguine picture than other countries.
JO: INM will be there because it is the most profitable of the Irish papers so while it's going to be a tough job involving retraction, the end result will be a viable ongoing newspaper/ online newspaper plus ancillary businesses and that's where it's going to get interesting and I'm disappointed I am not there.
I was definitely stabbed in the back. I certainly wasn't stabbed in the front. If I was stabbed in the front I would have got a call from Denis O'Brien saying I'm going to vote against you, I didn't even know at the AGM -- the only time I knew was when his representative, a very nice fellow called Eoin O'Connell, a solicitor for Frys, stuck his hand up on the vote and then he very kindly came up to me afterwards and said, "I'm really sorry about this but those were my instructions" and I said, "Fine, don't worry about that".
AH: Do you think you could ever see yourself back as chairman?
JO: Ah no. Denis's nominees didn't vote for me in the first place. Why not I'm not quite sure, I think because they felt that I was going to be another O'Reilly nominee, whereas I made it perfectly clear when I was interviewed, that the one thing I am is I'm independent, I pride myself on it and some people don't like that.
AH: So that brings us full circle -- the independent question.
JO: Do I think we will be independent -- I hope so. And and I would like to think that on the financial/business side, the restructuring and all this kind of thing of course it's very important that people with Denis's expertise have input.
But I would like to think that whoever is the chairman never gets the call that I got on April 7.