Inspectors face lengthy task in INM inquiry
All signs indicate investigation at media group will be a slow burner, writes Shane Phelan
Anyone who expected a dramatic raid on the offices of Independent News & Media (INM) in the aftermath of the appointment of inspectors will have badly misjudged the task at hand.
In the days after the High Court ruling there was no sign of inspectors Sean Gillane SC and Richard Fleck at INM's headquarters in Dublin's Talbot Street, where its flagship titles, including this newspaper, are produced.
Indeed close observers of the drama unfolding at the country's largest media group believe it could be several weeks before they begin their investigation in earnest.
Even after that, all the signs point to a slow burning inquiry that may take two years or more to complete. The reasons for this are simple. It will be up to the inspectors, both highly experienced lawyers, to decide how to proceed. But to some extent, their approach will be dictated by the scale of the task.
There are many strands to the inquiry approved by High Court President Mr Justice Peter Kelly, who suggested the inspectors may wish to break their task into modules.
Each of those strands has generated a veritable mountain of documentation since the Office of the Director of Corporate Enforcement (ODCE) launched an inquiry on foot of a protected disclosure by former INM chief executive Robert Pitt in November 2016.
Before the inspectors can even consider interviewing people with relevant information they will need time to familiarise themselves with dozens of affidavits and hundreds of exhibits.
There is also a large cast of characters to get to grips with.
In one arm of the inquiry alone, it is alleged six different companies and six individuals were involved in extracting and examining information held on INM's IT back up tapes.
Then there is Leslie Buckley, the former INM chairman who directed the so-called "data interrogation" in 2014.
His explanation for the exercise - that he was searching for information about a contract as part of a "cost reduction exercise" - was not accepted by the ODCE.
There is also Denis O'Brien, who owns 29pc of INM and nominated Mr Buckley, a long-time business associate, to the board. An Isle of Man company he controls paid invoices associated with the interrogation.
Then there are 19 people, 18 of whom are still alive, whose rights, in the words of Mr Justice Kelly, may have been transgressed in the most serious way by this activity.
Their names appeared on a list apparently used in searches of the material.
The list included prominent journalists such as Sunday Independent deputy editor Brendan O'Connor and former Irish Independent reporter Sam Smyth, former INM directors and two senior barristers who worked for the Moriarty Tribunal. Additional characters crop in other potential modules.
The inspectors also have to examine allegations that Mr Pitt and INM chief financial officer Ryan Preston came under pressure from Mr Buckley to pay an inflated price for Newstalk, the radio station owned by Mr O'Brien.
Both resisted and the deal was ultimately abandoned.
There is also the matter of proposed success fees for Island Capital, an O'Brien-owned company, and Paul Connolly, another O'Brien board nominee, in connection with a share sale.
The response of the then INM board to disclosures by Mr Pitt and Mr Preston will also be investigated, further expanding the cast of characters for the inspectors.
Another section of the probe will deal with possible breaches of EU market abuse regulations, primarily relating to communications between Mr Buckley and Mr O'Brien. But the inspectors will also consider whether "inside information" was also shared with Mr O'Brien's spokesman James Morrissey.
They will also examine whether information that was confidential to INM was also disclosed to his adviser Dominic Shorthouse and to Dermot Hayes of Island Capital.
Even though the inspectors have extensive powers of compellability and can examine relevant persons on oath, the scene is set for a long and potentially very expensive inspection process. INM has already spent €1.9m this year fighting their appointment on the grounds it would be disproportionate and seriously damage the company. Mr Justice Kelly rejected such arguments, saying the appointment was justified and in the public interest.
He said it could be argued the inspection process would be of advantage to INM as it would help "ensure that no future chairman or director will be able to behave in the manner which it is alleged Mr Buckley behaved".
Be that as it may, an expensive and potentially distracting time now lies ahead for INM's management. Although the State will pay the inspectors' costs, the High Court can direct that these be recouped from the company.
INM has pledged to cooperate fully with the inspectors but has warned the answers being sought lie with people outside the company.
Mr Buckley, who departed INM in March, insists he will be vindicated. Mr O'Brien, whose shareholding has remained unchanged throughout the controversy, has yet to comment publicly.