INM claims about ODCE inquiry ‘absolutely wrong’, court told

The corporate watchdog has said it was “absolutely wrong” for Independent News & Media (INM) to claim it was deprived until last March of information casting doubt on its former chairman Leslie Buckley’s explanation for the removal of data from the company in 2014.

Lawyers for then-INM chief executive Robert Pitt gave the company information to that effect last August, the High Court heard.

It was “very curious” for INM to complain that “critical” information came as a “bolt out of the blue” to the company when the Director of Corporate Enforcement (ODCE) moved last March to appoint inspectors to the company, Brian Murray SC, for the ODCE, said.

He said it would appear, based on information obtained to date, that “Mr Pitt may have been right and Mr Buckley may have been wrong”.

There was "the prospect" Mr Pitt may also have been right in relation to his concerns about other issues, including the proposed purchase of Newstalk from Communicorp, a company owned by INM's largest shareholder Denis O'Brien, which ultimately did not proceed.

Counsel stressed the ODCE had made no “findings” on these issues, which would be a matter for the court if INM loses its judicial review challenge aimed at halting the appointment of inspectors to the company.

‘Falsity and absurdity’

Treating the ODCE’s concerns, as set out in his sworn statement seeking inspectors, as if those were conclusions in a report, demonstrated the “falsity and absurdity” of INM’s arguments in the judicial review, Mr Murray said.

The judicial review concluded on Thursday, and judgment was reserved by Mr Justice Seamus Noonan.

ODCE chief Ian Drennan initiated the application for inspectors over concerns about the alleged data breach at INM and other issues arising from protected disclosures made by Mr Pitt and INM chief financial officer Ryan Preston in 2016 and 2017.

INM argues there is no basis for appointing inspectors, and the ODCE application was made in breach of its right to fair procedures.

In closing arguments for INM, Paul Gallagher SC said it did not accept the criticism of it by the ODCE. INM did not in August 2017, or before March 2018 , have a “critical” document that cast doubt on Mr Buckley’s explanation for the data removal or a spreadsheet containing the names of 19 people whose data may have been accessed, he said. The ODCE had that spreadsheet, but had not provided it to INM for several months.

INM should not be criticised for having accepted Mr Buckley’s explanation that the data interrogation was part of a cost-reduction exercise linked to a legal services contract, as INM had no evidence suggesting he was telling untruths in that regard, Mr Gallagher said.

In the absence of such evidence it would have been an “enormous step” to suggest to its then chairman that he was telling an “outright lie”.

INM was in a “very difficult” position in 2017 because of a dispute between Mr Pitt and Mr Buckley, and it was only in August that Mr Pitt raised concerns about the possible data breach, which dated back to October 2014.

Very seriously

The company took the matter very seriously, the relevant people were interviewed, and it hired Deloitte to investigate a range of issues. INM's IT director Gerry Wilde disputes a number of matters set out by Mr Pitt arising from a conversation between them, counsel also said.

Earlier, Mr Murray said Mr Pitt had said he had concerns, based on information communicated to him by Mr Wilde, that large, indiscriminate amounts of data, including emails and records, had been extracted and removed from INM over a period from October 2014.

Mr Pitt had said the information suggested the data was to be searched by third parties in relation to certain people, including former INM chief executive Gavin O'Reilly; former executive Karl Brophy; and possibly legal advisers, for the possible benefit of third parties.

Mr Pitt also outlined concerns that an invoice for a third party allegedly involved in accessing the data was paid by Blaydon, a company linked to Mr O'Brien. Mr Pitt had asked that his concerns be notified to the Data Protection Commissioner (DPC) and that the INM board convene to discuss them, counsel said.

INM had notified the DPC on August 24th but the ODCE had raised various points about that notification, he said. INM had told the DPC the data was accessed for a “limited business purpose” when INM had information suggesting it could not be “quite so confident about that”.

The DPC was also not told “someone outside INM paid for this”, raising issues over why someone outside INM would do so, and what rights such payment gave over the data exercise.