Buckley’s exit ‘does not diminish concerns’ about INM, watchdog says

Corporate law regulator criticised media company’s governance and management

Former INM majority shareholder Sir Anthony O’Reilly and pupils from Belvedere College choir at an event held in his honour at Old Belvedere Rugby Club on Saturday. Photograph: Conor Pope

Former INM majority shareholder Sir Anthony O’Reilly and pupils from Belvedere College choir at an event held in his honour at Old Belvedere Rugby Club on Saturday. Photograph: Conor Pope

 

Director of Corporate Enforcement Ian Drennan has expressed concerns about the affairs of Independent News & Media (INM) that extend beyond the scope of actions by former chairman Leslie Buckley, court records show.

Mr Drennan has argued in court papers that Mr Buckley’s resignation as chairman last month “does not diminish my concerns, nor does it diminish the necessity that these matters be further investigated”.

The State’s corporate watchdog made the claim as part of his application to have High Court inspectors appointed to conduct a deeper investigation of the company.

Following its own year-long investigation, the Office of the Director of Corporate Enforcement (ODCE) raised concerns about “extensive” potentially unlawful conduct including a suspected major data breach at INM.

The regulator has said that possible breaches of company law, stock-market rules, protected-disclosures legislation and data-protection law may have occurred at the country’s largest media company.

“While the chairman was, obviously, a central figure in many of the events and incidents I have outlined above in the background of this application, I say that it is also obvious from what I have set out above that my concerns as to the affairs of INM extend well beyond the scope of the chairman’s own individual actions,” said Mr Drennan towards the end of a lengthy affidavit to the court.

‘Inadequate response’

Mr Drennan has argued that there are “circumstances suggesting deficiencies in governance and oversight, a lack of appreciation of the gravity of the allegations made and an inadequate response to those allegations and apparent unlawful conduct . . . by those involved in the governance and management of INM.”

INM will resist the ODCE’s application for inspectors by trying to convince the courts that there is no longer a need for more outside investigators since Mr Buckley has left.

The genesis of this strategy became apparent almost two weeks ago when the company wrote to the so-called INM 19, the group of individuals whose data was allegedly breached, directly blaming Mr Buckley for the affair.

The company told the INM 19 that the 2014 extraction of their data was “unauthorised” and happened “on the instruction of the then chairman”.

Mr Buckley has said he will “robustly defend” himself against all allegations.

INM’s lawyer Shane Murphy SC told a court hearing last week the company believes that the agency “best equipped” to investigate the data breach is not the ODCE, but the Data Protection Commissioner (DPC).

Mr Drennan, however, has highlighted in his affidavit his concerns that INM may have already misled the DPC about the seriousness of the suspected data breach – a claim INM denies.

To help advise the company on its legal strategy, INM has brought in Paul Vickers, the former legal director of Trinity Mirror who led the UK media group’s response to the phone-hacking scandal in Britain.

Former INM chief executive Gavin O’Reilly has questioned whether the company’s board was sufficiently independent to be able to manage the issues raised by the ODCE in an internal inquiry given that many directors were on the board when these matters were revealed last year and earlier this year.

“I think it’s probably inevitable that external inspectors will be appointed,” said Mr O’Reilly, one of the people on the INM 19 list, at an event at Old Belvedere Rugby Club in Donnybrook, Dublin to honour his father Sir Anthony O’Reilly, the former billionaire who was once INM’s biggest shareholder.