The decision of the Corporate Enforcement Authority (CEA) not to bring any enforcement action on foot of its six-year long investigation into data breaches and other issues at Independent News and Media (INM) has drawn a predictable response from Denis O’Brien and Leslie Buckley.
O’Brien was the largest shareholder in INM – now Mediahuis Ireland – and Buckley was the chairman at the time of the data breaches which were revealed after the company’s chief executive Robert Pitt and chief financial officer Ryan Preston made protected disclosures to the CEA’s predecessor – the Office of the Director of Corporate Enforcement (ODCE). They raised several issues that concerned them about Buckley’s stewardship of the media organisation.
O’Brien and Buckley have seized on the decision not to prosecute – disclosed in the authority’s annual report last week and a year after High Court inspectors appointed to investigate the issues raised by Pitt and Preston found no breach of company law – to wholeheartedly rubbish the CEA and its chief executive Ian Drennan.
Buckley said there were “serious questions” over the way the investigation was conducted by the ODCE including seeking the appointment of High Court inspectors in 2018. He said that the ODCE adopted “a highly questionable approach, to say the least”, in not meeting him before seeking the appointment.
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“The taxpayer could have been saved in excess of €5.6 million and €40 million overall in legal costs,” according to Buckley.
[ Enforcement authority’s costly INM probe leaves unanswered questionsOpens in new window ]
O’Brien took a similar line saying: “Mr Drennan’s conduct showed little respect for due process, proper procedures or basic objectivity. As a result, he inflicted and facilitated very significant reputational damage for several individuals over six years.”
History tends to be written by the victors and Buckley and O’Brien are both entitled to put their spin on the decision not to prosecute. They would be foolish not to take the opportunity when it presented itself.
But some facts are worth remembering, not least that Buckley welcomed the appointment of the High Court inspectors in 2018. “I welcome the opportunity to vindicate my good name through the inspection process,” said Buckley in a statement at the time. “I intend to robustly defend myself against each and every allegation. I continue to reserve my position.”
It was open to Buckley – who had stepped down as chairman of INM at that stage – to challenge the appointment on the basis of what he now describes as the “highly questionable” decision not to talk to him first. But he didn’t.
INM did challenge the appointment robustly saying that it was unnecessary and damaging. They lost. The Judge in the case – Peter Kelly – concluded that Drennan and the ODCE had met six of the 10 criteria necessary for the appointment of an inspector. It was a slam dunk and INM decided not to appeal the decision.
[ Leslie Buckley questions way that corporate enforcer investigated INM sagaOpens in new window ]
O’Brien was not a party to the proceedings, but he, too, could presumably have objected to what he now describes as Drennan’s lack of “due process, proper procedures or basic objectivity”.
Perhaps with the benefit of hindsight, Buckley may regret his decision not to oppose the appointment but last week’s more-in-sorrow-than-anger tone and why-didn’t-you-just-come-and-talk-to-me-first spiel doesn’t really fly six years later.
What does hold up is the report of the two inspectors appointed to the company by the High Court, Seán Gillane SC and Richard Fleck CBE, which upheld Pitt and Preston’s version of events and was highly critical of Buckley.
They found that he was in breach of his responsibilities as a director, but crucially they concluded his actions were not done to prefer the interests of O’Brien over the other shareholders in the company including businessman Dermot Desmond.
They found that Buckley failed to tell the board that Island Capital – O’Brien’s personal investment company – had been engaged to advise on the sale of INM’s Australian interest and was in line for a €4 million payout. Not disclosing this was “was inconsistent with his responsibility as a director to disclose material facts”, according to the inspectors. The payment was not made in the end.
They also found that Buckley should not have involved himself to the extent that he did in the proposed purchase of the radio station Newstalk from O’Brien by INM. That transaction did not go through either.
With regard to the extensive external trawls of INM’s emails organised by Buckley in 2016 that were the central to the inspectors’ investigation, their report concluded; “It is clear that Mr Buckley’s disclosure of confidential information to Mr O’Brien after August 2016 was not in compliance with the company’s policies and, in particular, the terms of the memorandum [not to disclose confidential INM information] that he signed,” they said.
The report found that O’Brien did not misuse the information provided to him by Buckley. They also concluded Buckley did not break company law. This finding ensured that no criminal proceedings against Buckley were likely to ensue and last week’s low-key announcement to that effect by the CEA was inevitable as was the twist put on it by Buckley.
It might have been a better idea to keep the head down and take the win.
