High Court receives first interim inspectors report into INM affairs

The High Court has received the first interim report of the inspectors appointed by it to investigate the conduct of affairs at Independent News & Media.

The report was presented on Thursday to the president of the High Court, Mr Justice Peter Kelly, who had appointed the two inspectors - barrister Sean Gillane SC, who specialises in criminal law, and Richard Fleck, a UK based solicitor and corporate governance expert - last September.

Mr Gillane today sought and secured the necessary permission to provide the report to the court. A further report may be delivered in October but a date for that will be fixed later.

Mr Justice Kelly said he was happy to make the order to receive the report which he noted was delivered on time.

Neil Steen SC, for the Director of Corporate Enforcement (ODCE), Ian Drennan, sought a copy of the report and the judge said the DCE had a statutory entitlement to that and it would be provided to him later today.

The judge noted it was for the court to decide whether to give others a copy of the report.

Mr Steen said the ODCE would like advance notice of those seeking copies before any decision was made.

Shane Murphy SC, for INM, said it would be seeking a copy.

The judge, noting other parties may wish a copy and may not be aware of the application today, said he would fix Friday May 3rd for hearing anything the ODCE has to say relating to the report and regarding any parties to whom the report should be furnished. He would also hear applications from others for the report.

The ODCE had sought the inspectors appointment arising from his concerns over a number of matters, including an alleged data breach at INM in 2014.

The ODCE applied to the High Court early in 2018 following his office’s year long investigation into matters raised in the protected disclosures made in 2016 and 2017 by former INM CEO Robert Pitt and former INM Chief Financial Officer Mr Preston.

Arising from that investigation, the ODCE raised concerns about issues including an alleged data breach at INM in 2014. That involved data being exported from the jurisdiction and interrogated by third parties in what then INM Chjairman Leslie Buckley, who stepped down in March 2018, has said was a cost-cutting exercise called Operation Quantum.

Mr Drennan had said the purpose of the data interrogation "remains unclear but which certainly appears to be suspect and requiring further investigation".

The inspectors terms of reference entitle them to investigate most of the issues raised by the ODCE, including the adequacy of the INM Board’s response to the protected disclosures.

In his judgment last September appointing the inspectors, Mr Justice Kelly said what was alleged was "very serious indeed". He said there was evidence, including concerning the alleged interrogation of data of journalists and others, suggestive of INM's affairs being conducted for an unlawful purpose.

He was also concerned about the circumstances concerning the proposed acquisition by INM of Newstalk Radio from a company of INM's largest shareholder, Denis O'Brien, and the proposed payment by INM of a €1m 'success fee' to another company of Mr O'Brien's.

While neither of those payments proceeded, they were "certainly suggestive of an unlawful purpose directed to the benefit of Mr O'Brien directly or indirectly and the detriment of the company", he said.

He was satisfied many questions “remain to be answered” about “disquieting” issues raised by the ODCE, including the alleged removal from INM, and interrogation, of the data of 19 persons, including journalists, former INM employees and executives and two senior counsel for the Moriarty Tribunal.

The appointment was in the public interest in the context of the regulation of public companies, the nature of INM's business and the importance of a free press, he held.

The evidence suggested the rights and entitlements of some of those persons who data was allegedly accessed may have been transgressed in “the most serious way”. It also suggested the bills for the data interrogation were paid by a company beneficially owned by Mr O’Brien.

There was also evidence, based on texts and emails exchanged between Mr O’Brien and former INM chairman Leslie Buckley, suggesting there may have been a breach of Market Abuse Regulations, he said.

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