Chairman of INM ousted in shareholder ballot
INDEPENDENT NEWS & Media was left without a chairman last night after votes cast at its annual meeting in Dublin by businessmen Denis O’Brien and Dermot Desmond ousted experienced lawyer James Osborne from the role.
Chief financial officer Donal Buggy was also voted off the board, leaving it with just five members. It had 11 on April 18th, the day before former chief executive Gavin O’Reilly resigned.
An emergency meeting of the board of INM, which followed the agm in the Citywest Hotel in Saggart, was adjourned until early next week, with no decision taken on a new chairman.
Englishman David Reid Scott, who only joined the INM board last December, had been tipped to take on the role, at least on an interim basis.
Speaking to The Irish Times last night, INM chief executive Vincent Crowley said the issue of a new chairman would be addressed at the board meeting next week.
INM would also seek to begin a process to recruit “two or three” new directors to bolster its ranks, he added. When asked whether the current board could be considered cohesive or united, Mr Crowley said: “Yes I would actually. It’s a smaller board, but yes it’s cohesive.”
He said Mr Buggy would remain as chief financial officer in spite of being voted off the board.
Mr Osborne, who replaced Brian Hillery as chairman last October, secured just 82.5 million votes of the 374.5 million cast by INM shareholders yesterday.
By contrast, Mr Buggy received 155.3 million votes.
It is understood Sir Anthony O’Reilly, who owns about 13 per cent of INM, abstained in the vote on Mr Osborne, who declined to comment to media at the agm.
This reflects the central role Mr Osborne played in the removal of his son, Gavin O’Reilly, as chief executive on April 19th.
This move would have been supported by Mr O’Brien, INM’s biggest shareholder and a bitter rival of the O’Reillys.
However, Mr Osborne fell foul of the entrepreneur following a row with non-executive director Paul Connolly, a representative of Mr O’Brien on the INM board, over the €1.87 million exit package paid to Mr O’Reilly.
Mr Connolly has taken a legal challenge in the Commercial Court against the payout.
As a result of this, Mr Osborne called on Mr Connolly to resign and when he refused, a majority of the board – including Mr Crowley – passed a resolution to recommend that shareholders vote against his re-election.
Mr O’Brien voted his 111 million shares against both Mr Osborne and Mr Buggy, but in favour of Mr Connolly’s re-election.
In a statement read by a representative at the meeting, Mr O’Brien, who owns just under 30 per cent of INM, said a “lack of leadership has cost the company dearly over many years”. However, he said Mr Crowley had his “total confidence”.
A representative of Mr Desmond, who owns 6.36 per cent of INM, read a statement describing the payment to Mr O’Reilly as “excessive and totally without justification”. Mr Desmond was “fully supportive” of Mr Connolly’s stance on the matter. “Removing or punishing those who disagree is precisely the behaviour that leads to groupthink,” he added.
The dramatic events of yesterday’s agm leaves INM with five board members – Mr Reid Scott, Mr Crowley, Mr Connolly, Lucy Gaffney, another representative of Mr O’Brien, and Frank Murray.
The company has shed five board members since Mr O’Reilly’s departure.
Baroness Margaret Jay, Bengt Braun and Lothar Lanz all retired before the agm while Mr Osborne and Mr Buggy were voted out.
Mr Crowley said INM’s focus would continue to be on achieving cost reductions in the business and on reducing its debts, which stand at more than €420 million.
Since taking over as chief executive he has closed its head office in Citywest and relocated to the editorial base in Talbot Street, shut the company’s London base, and implemented a redundancy scheme at the Sunday World newspaper which will see 15 staff leave.
He has also decided not to “backfill” the chief operating officer’s role that he previously held.
Mr Crowley told the agm INM would seek to address its €148 million pension deficit in a fair way but said there was “no magic wand” to deal with this.