Corporate watchdog ‘still concerned’ about INM despite Buckley’s departure

The Director of Corporate Enforcement still has concerns about Independent News & Media even though its former chairman Leslie Buckley has resigned, according to an application seeking the appointment of High Court inspectors to the media group.

Although the former chairman was obviously a "central figure" in the events he had concerns about, Ian Drennan said in an affidavit, what the corporate watchdog has set out extends "well beyond" the actions of Mr Buckley, who stepped down on March 1st. He had announced his intention to leave in January. Mr Drennan's affidavit was filed on March 23rd in support of an application to be heard by the High Court on April 16th.

Last year a committee of the INM board considered the possibility that Mr Buckley might temporarily step aside while a controversy he was associated with was investigated, but it was concerned about the reaction of the businessman Denis O’Brien, according to the affidavit. In the event Mr Buckley did not step aside. Mr Buckley is a long-time associate of Mr O’Brien, who is the largest shareholder in INM and nominated Mr Buckley to serve on the INM board.

The board of INM, under its new chairman, Murdoch MacLennan, who is also deputy chairman of Telegraph Media Group, is taking legal advice before deciding how to respond to Mr Drennan’s application.

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In the affidavit Mr Drennan said there were circumstances suggesting deficiencies in governance and oversight at INM, and a lack of appreciation of allegations made by its former chief executive Robert Pitt.

Mr Pitt, who is no longer with the company, made protected disclosures both internally to INM and to Mr Drennan’s office. The disclosures focused on the proposed sale of the radio station Newstalk to INM for €20 million more than Mr Pitt believed it was worth, and an enormous apparent data breach at INM.

Newstalk is owned by Mr O'Brien, and work done on the data after the apparent breach was paid for by a company owned by Mr O'Brien called Blaydon Ltd. Mr Buckley was involved in both the proposed Newstalk deal, which did not go ahead, and events surrounding the apparent data breach.

Legal advice

In his affidavit Mr Drennan notes that in the run-up to the INM board meeting of January 18th this year, at which it was decided that changes to the board would take place on March 1st, there had been extensive media coverage of events at INM and a court application involving Mr Buckley and Mr Drennan’s office. That case involved significant public disclosures about what had apparently happened with data from an INM server.

The affidavit also reveals that the committee of the board got legal advice about the possibility of Mr Buckley stepping aside temporarily on a no-fault basis because of his involvement in the matters that Mr Pitt had raised and that the ODCE was investigating. When the committee met in May 2017 it noted that it risked a negative reaction from investors generally “and from the significant shareholder”, a reference to Mr O’Brien.

Mr Drennan also criticises Mr Buckley for disclosing to people outside INM the names of people who had made protected disclosures. Mr Pitt and the INM chief financial officer, Ryan Preston, made internal protected disclosures in November 2016. Mr Buckley, according to Mr Drennan's affidavit, disclosed Mr Preston's identity to Mr O'Brien, to Pat Claffey of Island Capital, a company associated with Mr O'Brien, and to Dominic Shorthouse, who is described as an adviser to Mr O'Brien.

In a statement last week Mr Buckley said he will “robustly defend” himself “against each and every allegation” made by the ODCE.

Mr O’Brien has yet to comment on the controversy surrounding events at INM.