Former INM executive settles case over dismissal

FORMER Independent News and Media (INM) executive Karl Brophy has settled his High Court action against the company over his dismissal from his €300,000 per year job.

On the third day of his action yesterday, Mr Brophy’s counsel Oisín Quinn told Ms Justice Mary Laffoy the case had been settled following talks.

Brian O’Moore SC, for INM, then read an agreed statement in which INM confirmed no allegation of misconduct had ever been made against Mr Brophy and no such allegation was maintained during the proceedings.

Mr Brophy also accepted that the decision to make him redundant was made by INM chief executive Vincent Crowley and that businessman Denis O’Brien, the largest shareholder in INM, had “no hand, act or part in that decision”, counsel said.

On the application of the sides, Ms Justice Laffoy then struck out the matter. No further details of the settlement were provided in court.

In his original injunction proceedings, Mr Brophy had alleged Mr O’Brien was behind the decision to dismiss him. He claimed this was because of a history between the two men and because Mr Brophy was appointed director of corporate affairs and content development at INM by its former chief executive Gavin O’Reilly, who stood down with a €1.87 million exit package last April.

Mr O’Reilly was in court yesterday for the announcement of the settlement and to hear some evidence given by his successor Mr Crowley.

Mr Crowley told the judge that, for some time before his departure, Mr O’Reilly and Mr Brophy had been working to try to back up Mr O’Reilly’s view that Mr O’Brien had significant non-performing borrowings with the former Anglo Irish Bank and was therefore effectively funded by the Irish taxpayer (as Anglo had been nationalised).

The two men put a significant amount of time and effort into looking into this allegation in the hope that it could be put into the public domain, Mr Crowley said.

The decision to make Mr Brophy redundant was part of a decision by Mr Crowley to effect cost savings in the company, Mr Crowley also said.

Those restructuring measures involved transfer of the company’s head office from Citywest in Dublin to Talbot Street in the city centre where editorial and advertising departments are based.

Apart from the printing presses, Citywest was where most of the company’s executives were based, along with some financial staff.

Just days after his appointment, Mr Crowley said he had prepared a document listing the roles he felt would be made redundant in the move to Talbot Street. These were Karl Brophy’s job and the role of group treasurer. A further saving was made through Mr Crowley’s previous job as chief operations officer not being filled.

Mr Crowley said Mr Brophy’s appointment had been presented by Mr O’Reilly to himself and the then chief financial officer Donal Buggy as a “fait accompli”. Normally, such appointments were done on a collaborative basis, he said.

The court was told last week that the reasons offered by Mr O’Reilly for appointing Mr Brophy included that less money would have to be spent on outside public relations consultants.

Mr Crowley said yesterday he now expected significant savings in the company’s bill for outside PR consultants.

This cost about €40,000 per annum normally, but it could cost between €80,000 and €100,000 this year because of all that had been happening, he said.

The move to Talbot Street was part of a plan drawn up by Mr O’Reilly, called Project Resolution, with the aim of looking at costs across the entire INM operations because advertising and circulation in Ireland was continuing to drop, Mr Crowley added.

He said he learned after his appointment that, as part of the cost saving measures, Mr O’Reilly had looked at what it would cost to make the position of chief operations officer (Mr Crowley’s then job) redundant.

This happened after Denis O’Brien had in July last year written a letter to then INM chairman Brian Hillery calling for a change in INM senior management and suggesting Mr Crowley would be an “ideal replacement” for Mr O’Reilly.

Mr Crowley said he was not aware of Mr O’Brien’s recommendation of him and was very surprised by that as he had only met Mr O’Brien twice before.

The first time was several years ago at a social function; the second was at a Dublin Chamber of Commerce function in 2010 when Mr O’Brien happened to be passing his table and he had introduced Mr O’Brien to a number of INM executives. He spoke to Mr O’Brien for about five minutes then.