INM hits back over governance report
Media magnate Tony O’Reilly’s Independent News & Media today robustly defended itself against accusations about the way the company is run.
Businessman Denis O’Brien was behind a report published ahead of the annual general meeting of INM today which called into question the corporate governance of the global media empire, whose titles include The Irish Independent and The Independent in London.
Mr O’Brien holds an 8.35% stake in INM and his offensive was seen in business circles as the start of a possible bid for the group.
Former Canadian Prime Minister Brian Mulroney, a INM director and chairman of the company’s corporate governance committee, led the counter attack.
He said: “This report was essentially unimpressive and unpersuasive. It was thrown together and contains serious mistakes.”
He told shareholders: “Honestly, there was not a scintilla of evidence of impropriety or wrongdoing of any kind…This company is as clean as a hounds tooth.”
He said the company had responded to letters sent to Independent News & Media by Denis O'Brien in "a full and honest manner".
Mr O'Brien has rejected that, saying: "This was a totally false and misleading response…the responses to the letters…were devoid of detail as any examination of the correspondence would reveal. "
In a statement, he said: "Unfortunately the Board of Independent News & Media has failed abysmally to respond to and deal with the serious matters of corporate governance raised in the letters. These are matters we will return to."
He said the letters requested full disclosure on a range of matters including expenses paid to the chief executive for entertainment at his various residences, the use of a private jet and other expenses.
Mr O’Brien was not among the 200-plus people who attended the AGM at a hotel outside Belfast, but questions were put during the re-election of independent directors by nominees from two stockbrokers.
Brian Hillery, of Goodbody Stockbrokers Nominees, said there should be “fresh blood on the board”.
Andrew Clearfield, of Merrion Stockbrokers Nominees, said: “I am concerned this is not an independent board, that committees are not independent.”
He said four members of the O’Reilly family were on the board – making up one fifth of its directors.
He said: “The composition of the board seems to me to be more reminiscent of a wholly-owned family company rather than a public company.”
Shareholders appeared unimpressed with the interventions and went on to re-elect all independent directors who were up for re-election and to back the board in a number of motions.
In addition, former Conservative Chancellor of the Exchequer Kenneth Clarke was announced as a newly-appointed director.
His presence would materially strengthen the board, shareholders were told.
Mr O’Reilly did not enter the fray, but his son Gavin O’Reilly, INM’s chief operations officer, speaking after the AGM, questioned Mr O’Brien’s motives.
“There have been suggestions that he has been trying to destabilise the company in an opportunistic way to make a low bid for the company,” he said.
And he said it was unfortunate that rather than attending the meeting in person, Mr O’Brien had “used megaphone tactics”.
“I find it remarkable if this gentleman is so concerned about governance that he has not taken the time to contact us. I think if he has got something to say he should say it.”
He denied INM was now in open conflict with Mr O’Brien, but said people would have to wait and see whether the company decided to take legal action over the report.
Mr O’Reilly asked why Mr O’Brien had more than doubled his stake in the company in the last 15 to 18 months if he was so concerned about the way Independent was run.
In its annual report for 2006, INM reported revenues up at €1.64bn, an operating profit up 5.7% at €329.5m and a profit after tax of €198.4m.
