INM chairman voted off board

Chairman James Osborne and chief financial officer Donal Buggy have been voted off the board of Independent News & Media.

At the media group's AGM in Citywest today, Denis O'Brien's representatives voted against the re-appointment of Mr Osborne and Mr Buggy.

The two men are just latest casualties in the long-running battle for control of the group which saw former chief executive Gavin O'Reilly step down in April.

Some 221.8 million votes out of 374.5 million went against the re-election of Mr Osborne, the company said in a statement.

Earlier, INM's chief executive Vincent Crowley told shareholders that company planned to close its head office in Citywest and move to Talbot Street, the site of its Irish newspaper operations.

Mr Crowley also said the media group has closed its UK office, and will exit its lease on June 30th. INM sold the London-based Independent newspaper in 2010. A redundancy scheme for the Sunday World has been fully subscribed, he said.

Mr Crowley said the paydown of debt is not, of itself, "a strategic objective" for the company, but it will "drive shareholder returns as value is transferred from debt to equity".

He added he company intends to "continue to profitably enhance" its position by developing an increasingly diverse revenue stream through enhanced focus and measured investment in digital.

It is understood that Dermot Desmond, who owns 6.36 per cent of INM, had already cast his proxies against the re-election of Mr Osborne and other directors, with the possible exception of Paul Connolly and Lucy Gaffney, who represent Mr O’Brien on the board.

There was growing expectation last night that Mr O’Brien, who owns just under 30 per cent of INM, would vote against the re-election of Mr Osborne, who became chairman last October.

Mr Crowley and non-executive directors Frank Murray and David Reid Scott were also up for re-election at today's AGM. Mr Murray has served nine years on the board, while Reid Scott was appointed in December.

Mr Osborne has clashed with Mr Connolly over his decision to pursue a legal action against the €1.87 million exit package paid to former chief executive Gavin O’Reilly on April 19th. This action being heard in the Commercial Court.

On April 26th, Mr Osborne asked Mr Connolly to resign from the board of INM after he initiated his legal challenge. The board has recommended to shareholders that they oppose Mr Connolly’s re-election.

Lothar Lanz yesterday became the latest INM non-executive to step down from the board. Baroness Margaret Jay and Bengt Braun also recently retired as non-executives.

Mr Osborne told the Commercial Court yesterday that he decided Mr O’Reilly’s position as chief executive had become untenable once INM’s banks lost confidence in him. The “tipping point” that led to a consensus among INM directors that Mr O’Reilly had to go was a series of “quite extraordinary” emails and a meeting between Mr O’Reilly and Bank of Ireland, Mr Osborne said.

Asked by Michael Cush SC, for INM non-executive director Paul Connolly, whether what Mr O’Reilly had said to the bank constituted “bizarre behaviour”, Mr Osborne replied: “When you owe somebody €423 million, it is probably not a good idea to send emails accusing them of various things.”

Mr Osborne was being cross-examined on the second day of the action by Mr Connolly, who is seeking a declaration that the payment was unlawful.

Mr Osborne, a lawyer who has been on the boards of eight public companies, said the INM board had agreed the termination package for Mr O’Reilly following legal advice and in order to avoid time-consuming litigation. He told Mr Cush it became clear to him last March that Mr O’Reilly was no longer the right person for the job.