INM rejects watchdog's concerns about its response to information sharing with Denis O'Brien

By Ann O'Loughlin

Independent News & Media has told the High Court the State’s corporate watchdog unfairly criticised its response to his concerns about sharing of company information between Leslie Buckley, when he was chairman of INM, and its major shareholder Denis O’Brien.

INM disputes any of the information at issue was inside information but has said in sworn statements that it does not say that every communication "was in every instance appropriate", the court heard.

It had told the Director of Corporate Enforcement (ODCE) he has powers to act if he took a different view but he had not done so and instead criticised INM’s response, Paul Gallagher SC said.

In a sworn statement for INM, Dr Leonard O’Hagan said the Board did not consider an email by Mr Buckley to Mr O’Brien on November 28, 2016, which attached a draft stock exchange announcement before its issue, and another email of December 12, 2016, attaching a draft press statement before its issue, amounted to unlawful sharing of inside information.

Mr Gallagher said the ODCE had complained INM had directly addressed his concerns about just three of 13 communications.

That was “unfair”, Dr O’Hagan had responded to the communications focussed on by the ODCE and had said some of the specific issues raised were matters that could only be addressed by Mr Buckley, who stepped down as INM chairman last March.

INM had given a “reasoned response” and assistance and had also provided certain of its legal advice, he said.

It was “very important” for INM that the court note the ODCE is making no allegations of editorial interference, counsel stressed today.

He was continuing his arguments in the hearing of the ODCE application for inspectors.

The ODCE says there are circumstances for concern over the conduct of INM’s affairs arising from his office’s year-long investigation into certain matters arising from protected disclosures made by former INM CEO Robert Pitt and Chief Financial Officer Ryan Preston in 2016 and 2017.

Robert Pitt (left) and Leslie Buckley.
Robert Pitt (left) and Leslie Buckley.

Those matters include an alleged data breach during which data was removed from INM over a period from October 2014 and interrogated by third parties outside the jurisdiction.

Other issues include a proposed acquisition by INM of Newstalk Radio from a company of INM’s major shareholder Denis O’Brien at an allegedly substantial overvalue and the proposed payment of a €1m “success fee” to Island Capital, another company of Mr O’Brien’s, following the sale of INM’s shares in the Australian media group APN.

While neither the Newstalk sale nor fee payment proceeded, the ODCE has raised several concerns about them. He has also raised concerns about a number of corporate governance matters.

INM argues several of the issues raised by the ODCE are isolated and historic matters which have been appropriately and adequately addressed by INM and do not justify the appointment of inspectors. It argues the DPC investigation into the alleged data breach is adequate to address the ODCE concerns in that regard.

It denies any “culture of deference” exists within the media group towards Mr O’Brien, says INM maintains high standards of corporate governance and denies any breach of the Market Abuse regulations or the Protected Disclosures Act.

Today, Mr Gallagher said the DPC is carrying out an “extremely elaborate and all-embracing” investigation into the alleged data breach and can lay down requirements to ensure the tighter security required by the General Data Protection Regulation is complied with.

Leslie Buckley.
Leslie Buckley.

There was no need for a separate investigation into that matter by inspectors, he argued.

INM had also provided a report outlining the anticipated impact of the appointment on inspectors on its share price and business, counsel said.

The president of the High Court, Mr Justice Peter Kelly, said it is clear it is “bad news” for any company to have inspectors appointed and he could not think of any case where similar arguments were not made in seeking to prevent such appointment.

The hearing continues.

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