INM inspectors told Denis O’Brien knew about ‘data search’
Court documents say former chairman Leslie Buckley kept top shareholder informed
Leslie Buckley, former chairman of Independent News & Media. Photograph: Dara Mac Dónaill
Businessman Denis O’Brien knew about an operation to scour the email system of newspaper publisher Independent News & Media (INM) that was overseen by former chairman Leslie Buckley, according to an account of Mr Buckley’s interviews with High Court inspectors who are investigating the company.
In documents filed as part of Mr Buckley’s ongoing legal bid to have the inspectors removed, one of the inspectors, Richard Fleck, says “the data search”, which Mr Buckley claims was over a legal contract, was among a range of issues he told them he had kept “Mr O’Brien informed” of.
The data search culminated in the secret removal of its back-up IT tapes for searching by cybersecurity experts, which was carried out without the knowledge of top management and other board members and has led to several lawsuits against INM. This was paid for by Mr O’Brien’s Blaydon company.
The inspectors also plan to hire experts to examine the issue of whether Mr Buckley provided “inside information” on the former stock market-listed INM to Mr O’Brien, who was a 29 per cent shareholder in the group. Mr Fleck’s affidavit says Mr Buckley has “readily acknowledged” passing “confidential” information to Mr O’Brien, some of which was “undoubtedly price-sensitive”.
Mr Buckley has criticised the inspector’s account of his evidence on his contacts with Mr O’Brien, which was in a draft report they sent him. He says he considered Mr O’Brien an “insider” and had “absolute confidence” he would not use any information for “financial advantage”.
The inspectors say Mr Buckley also kept Mr O’Brien informed about INM’s sale of its stake in Australian publisher APN. Mr O’Brien’s separate stake in APN was sold “in a block” with INM’s. The investigation includes a “success fee” of €1 million proposed for Mr O’Brien’s Island Capital during the APN deal.
According to transcripts, former INM chief executive Robert Pitt, who subsequently fell out with Mr Buckley, says he felt he had a “gun . . . to my head” to approve the fee, which he suggests he only found out about on the night the transaction was to close. Mr Pitt had argued that Island had not done any work to earn the fee and it would have to be publicly disclosed, so Mr Buckley said to forget it.
Following an approach a few months later from Mr Buckley, Mr Pitt says he agreed to pay “€15,000 or €20,000” to former INM director and Mr O’Brien’s close associate, Paul Connolly, to reimburse him for a trip to Australia he took during the APN deal. He says Mr Buckley brought him Mr Connolly’s receipts from a Carlow Travel agent, “seeing as Paul did not get a fee”.
Mr Connolly told the inspectors he played a role in the deal from his base at the Shangri-La hotel in Sydney.
Mr Pitt told the inspectors that Mr Buckley was not used to having someone “stand up for what was right”. He said he became worried when his probation period as chief executive was extended. His family were moving to Dublin from Prague and he had put a deposit on a house in Rathmines but he cancelled it when relations deteriorated with the former chairman.
He says he “loved” his INM job and didn’t want to leave. He asked for advice from his father, who told him to “do what was right”.
Mr Pitt subsequently met INM director David Harrison, a nominee of the group’s other major shareholder, Dermot Desmond, in Ely restaurant to discuss problems with Mr Buckley, including the disputed Island Capital success fee. Mr Harrison was “shocked” to hear about it and said “there was no way Dermot would have known”. Mr Harrison says he told Mr Pitt: “Look, Robert, you need to watch this okay.”