Thursday 22 August 2019

ODCE scores a victory as INM waits for court inspectors to call

Independent House on Dublin's Talbot Street
Independent House on Dublin's Talbot Street
Dearbhail McDonald

Dearbhail McDonald

The decision by the President of the High Court, Mr Justice Peter Kelly, to appoint inspectors to Independent News & Media is a resounding victory for the Office of the Director of Corporate Enforcement led by Ian Drennan.

In the wake of the collapse of a long-running criminal law trial against former Anglo chairman Sean FitzPatrick, the State's corporate law watchdog was on the floor, facing calls for its disbandment.

Last year the ODCE accepted that witnesses were coached when giving statements during the investigation into Mr FitzPatrick, and that their evidence was contaminated. But yesterday the watchdog succeeded in securing comprehensive High Court approval to have inspectors appointed to Ireland's largest publishing group following a 15-month investigation sparked by a series of protected disclosures made by INM's former chief executive Robert Pitt and chief financial officer Ryan Preston.

The appointment of inspectors - a final order will not be made until tomorrow morning to allow INM to consider the judgment - is a rare event in Irish law.

Murdoch MacLennan, INM's new chairman, told the High Court that the board believed that the media company's very survival would be jeopardised if inspectors were to be appointed. However this contention was given short shrift by Judge Kelly, who said it was difficult to see how much more reputational damage could be caused, given the amount of information already in the public domain.

Judge Kelly did not rule on the substance of the ODCE's application, including the interrogation of INM's data at the direction of its former chairman Leslie Buckley, the proposed acquisition by INM of Newstalk radio and the proposed payment to Island Capital of a success fee associated with the disposal of INM's shareholding in APN.

But his ruling is grave nonetheless.

Judge Kelly said that he was satisfied on the basis of the evidence which was put before him that a number of the incidents relied upon by Mr Drennan are suggestive of the conduct of the affairs of the company for an unlawful purpose. He also said that whilst the Newstalk acquisition and the APN transaction did not ultimately lead to any loss to INM, the circumstances surrounding it are "certainly suggestive of an unlawful purpose directed to the benefit of businessman Denis O'Brien (INM's largest single shareholder and a long-term business associate of Mr Buckley) directly or indirectly and to the detriment of the company".

By any account, the observations of Judge Kelly, the country's most senior commercial law jurist, pose serious questions for Mr O'Brien and for Mr Buckley.

INM's board and management has pledged that the group's operations will continue, so far as possible, to be conducted as normal.

But there is nothing normal when an inspector calls.

Irish Independent

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