Watchdog to seek appointment of two inspectors to INM

The State's corporate watchdog is due to apply to the High Court on Monday for the appointment of two inspectors to investigate issues concerning the affairs of Independent News and Media.

Ian Drennan, the director of corporate enforcement, is expected to argue there is a compelling public interest for such an investigation.

By close of business in the High Court central office on Friday, INM had not filed a replying affidavit to the director’s application but could still do so when or before the matter comes into court on Monday afternoon.

It is listed before the president of the High Court, Mr Justice Peter Kelly, who has considerable experience of such applications, having appointed inspectors previously to National Irish Bank. That inspection lasted six years and ultimately lead to a number of NIB directors, and NIB chief executive Jim Lacey, being disqualified from acting as company directors for set periods.

Mr Drennan wants inspectors appointed to investigate the accessing by third parties of data from INM's systems from October 2014 along with various corporate governance issues and issues arising from protected disclosures by former INM chief executive Robert Pitt and chief financial officer Ryan Preston.

Both disclosures concerned a proposed acquisition by INM in 2016 of Newstalk, owned by Communicorp Group Ltd, a company of INM's major shareholder, Denis O'Brien, which never proceeded. Mr Pitt's disclosure also concerned a proposed fee payment in 2015 to Island Capital, another company of Mr O'Brien's, which also never proceeded. Other issues were also raised.

Mr Drennan has provided a 200-page affidavit to ground his application and a large number of exhibits. Further affidavits on behalf of the director were also filed in the High Court central office on Friday.

Mr Drennan wants orders, under the Companies Act, that the inspectors investigate and report on the affairs of INM as the court deems fit.

Third parties

He wants the investigation to address the accessing from about October 2014 by third parties, including but not limited to six named companies and six named individuals, of INM’s information technology systems and the collection, extraction and/or processing of data held on those, referred to as data interrogation.

The companies are Trusted Data Solutions UK Ltd; Trusted Data Solutions LLC; DMZ IT Ltd; Specialist Security Services Ltd; Reconnaissance Group Ltd and Resilient Defence Ltd. The six individuals, who are involved with one or more of those companies, are John Henry, Derek Mizak, Keith Duggan, Shane Henry, Robert Breen and Ron Cole.

Mr Drennan wants the inspectors to investigate the facts of and circumstances surrounding the data interrogation, the reasons, purpose and results of it, the knowledge of INM’s directors of it and how it was paid for. He also wants to know for whose benefit the interrogation was conducted and an investigation into the adequacy of the response of INM’s directors to notification of the data interrogation.

INM's response to the disclosures, including roles played by committees of its board, are also sought to be investigated

The court is also asked to permit the inspectors investigate the facts and circumstances of the proposed acquisition by INM from Communicorp in 2016 of Newstalk radio and the role played by then INM chairman Leslie Buckley in that regard. An investigation is also sought into the proposed payment of a "success" fee to Island Capital in March 2015 in connection with the disposal of INM's holding in APN News & Media and any role by Mr Buckley in that regard.

Further issues concern consideration of a fee to Paul Connolly, then an INM director, in connection with the APN transaction.

Newstalk acquisition

Mr Drennan also wants an investigation into the November 2016 protected disclosure by Mr Pitt and the December 2016 protected disclosure by Mr Preston, both of which addressed the proposed Newstalk acquisition.

INM’s response to the disclosures, including roles played by committees of its board, are also sought to be investigated. Mr Drennan wants an investigation into the circumstances in which INM decided to establish an independent review into the disclosures and any influence on Mr Buckley’s part in relation to the appointment of the two independent reviewers, or otherwise concerning the INM investigation.

An investigation is also sought into matters concerning Mr Buckley’s conduct as chairman of INM.

Several of the issues sought to be investigated concern the corporate governance of INM and Mr Drennan wants the inspectors to decide whether there have been any breaches of relevant laws, including the Companies Act, the Data Protection Acts, the Protected Disclosures Act and the Market Abuse Regulations.