INDEPENDENT Newspapers has indicated strongly that it will take legal action seeking compensation for losses suffered because of the growth of illegal cable operators. Its associate, Princes Holdings. claims it has lost £21 million to date because various governments have not enforced exclusive cable TV licences.
Independent Newspapers chairman, Dr Tony O'Reilly, said yesterday that the issue was "very much one of compensation". Seven years ago Princes Holdings, in which Independent is a 50 per cent shareholder, was granted 17 "exclusive licences" to supply cable services for certain regions across the State.
With its international partners, Telecommunications Corporation and UIH of Colorado, Independent invested £65 million in Princes to develop cable television in Ireland.
Dr O'Reilly said the country "cannot afford to break its word". He said other countries would see that there had been a cast iron agreement which was no longer cast iron.
Independent chief executive, Mr Liam Healy, said that the group was still considering its options regarding legal action. However, he said, there was a "very real possibility" that they would take legal proceedings. "Our US partners are very keen on going down that avenue," he said.
Mr Healy said Princes Holdings had suffered very substantial revenue losses as a result of government policies on the cable operator issue. "We have been denied subscribers we should naturally have had," he said.
Mr Healy and Dr O'Reilly were speaking after the Independent Newspapers a.g.m. in Dublin yesterday.
Mr Healy said Ireland was still one of Independent's strongest performing sectors. Circulation of the Sunday Tribune, in which Independent has a 29.9 per cent stake, was increasing, he said, and the group was pleased with its performance. The newspaper, which has racked up well in excess of £6 million losses over the years, is still receiving loans from Independent.
Mr Healy said the newspaper was now near break even point, and it was hoped this position could be achieved this year. He said the group which has a secured loan of £1 million against the now defunct Irish Press titles still hoped to get its money back.
However, he said Independent was not involved in helping Irish Press directors find a buyer for the titles, which have been on the market for some months.
Dr O'Reilly told shareholders that the group's New Zealand operation would be its "biggest single profit centre" this year and the group hoped to have a good increase in profits this year.
Last year Independent reported a 47 per cent increase in profits to £73.5 million. The Irish operation contributed £34.5 million.
On the issue of EMU, Dr O'Reilly said Ireland should not have an overvalued currency.
. Meanwhile, the Independent board announced a series of appointments following a meeting yesterday. Dr O'Reilly's son, Gavin, has been appointed to the board. He is director of production operations with Independent Newspapers and was previously managing director of Independent Directories.
Mr Bernard Somers, a leading accountant with Somers & Associates, has also been appointed 19 the board. Mr Somers (48) previously worked on reducing Independent's cost base at its Abbey Street operation.
Mr Vincent Crowley, finance director of Australian Provincial Newspapers Holdings, has also been appointed to the board. Born in Dublin, Mr Crowley (42) was previously group financial controller of Independent Newspapers.
One board member has retired. He is Mr Luis Da Silva, managing director of Jornalgeste, the Portuguese newspapers company in which Independent has a 16 per cent stake.
