Inspectors must look outside company for answers – INM chief

Caution: INM chief executive Michael Doorly. Picture: Frank McGrath
Caution: INM chief executive Michael Doorly. Picture: Frank McGrath

Independent News & Media (INM) has pledged to co-operate fully with inspectors appointed to investigate the conduct of its affairs – but has warned the answers being sought lie with people outside the company.

High Court President Mr Justice Peter Kelly yesterday said the inspectors could begin their work with immediate effect after counsel for INM, which publishes this newspaper, indicated it would not be appealing the appointments.

Sean Gillane SC and solicitor Richard Fleck were installed as inspectors following a lengthy probe by the Office of the Director of Corporate Enforcement (ODCE), sparked by a November 2016 protected disclosure by former INM chief executive Robert Pitt.

Among the issues they will investigate are concerns INM data, including journalists’ emails, was accessed by outside companies during a “data interrogation” directed by former INM chairman Leslie Buckley in 2014.

INM chief executive Michael Doorly told the Irish Independent the company would co-operate fully with the inspectors and respect the judgment of the court. But he cautioned that INM had already provided all relevant information under its control to the ODCE.

“I don’t think there is anything new that hasn’t been provided,” Mr Doorly said.

“They [the inspectors] are going to have to go outside of INM to get the full story.”

Mr Doorly continued: “The inspection will involve INM but also parties who are outside of INM, particularly in relation to the data breach, but also in relation to any of the other matters that arose from the protected disclosure. A lot of the protagonists are no longer within INM.”

Mr Buckley stepped down from INM’s board last March and is being sued by the company for breach of fiduciary duty, negligence, misrepresentation, breach of contract and wrongful interference with its economic interests.

Invoices connected with the “interrogation” were paid by Blaydon Limited, an Isle of Man company owned by businessman Denis O’Brien, INM’s largest single shareholder and long-time business associate of Mr Buckley.

It is unclear when the inspectors will begin their inquiries in earnest, but it is understood they may need to do a good deal of preliminary work before they are in a position to move forward.

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The inspectors are vested with significant statutory powers not available to the ODCE, including the powers of compellability and examination of relevant persons on oath.

Yesterday, the ODCE was awarded its costs for the application to appoint inspectors.

As well as the data interrogation issue, the inspectors will examine claims Mr Buckley put pressure on INM executives to pay an inflated price for Newstalk, the radio station owned Mr O’Brien. The deal was ultimately abandoned.

Also being examined are the circumstances surrounding a proposal, later withdrawn, that a €1m “success fee” be paid to Island Capital, a firm owned by Mr O’Brien, in connection with the sale of INM’s shares in Australian media group APN.

Concerns inside information was shared with Mr O’Brien by Mr Buckley, in breach of market abuse regulations, will also be probed.

Mr Buckley has pledged to defend himself against each and every allegation.

A spokesman for Mr O’Brien did not respond to a request for comment.

Irish Independent

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