INM fails to halt ODCE case as Central Bank considers market abuse case

Independent News & Media (INM) is considering its next step after the High Court dismissed its attempt to prevent the Office of the Director of Corporate Enforcement from seeking to appoint court inspectors to investigate it.

Following the failure of the application for judicial review, Mr Justice Peter Kelly, the president of the High Court, will next week fix a date for application by the State watchdog to have inspectors appointed to INM to investigate a suspected data breach and other issues raised in whistleblower complaints.

And, regardless of whether the ODCE eventually succeeds in appointing inspectors, INM now faces the spectre of another possible State investigation, this time under market abuse rules.

It emerged in court on Friday that the Central Bank wants formal access to the court papers in the ODCE case. The papers the Central Bank is seeking include the ODCE's concerns that INM's former chairman, Leslie Buckley, may have shared "inside information" with its biggest shareholder, Denis O'Brien, whom he represented on the board.

The ODCE has outlined at least nine separate instances where it says inside information on INM may have been passed to Mr O'Brien by Mr Buckley, including receiving stock market announcements ahead of other shareholders.

The Central Bank is the ultimate regulator of listed companies and has the authority to investigate all allegations of possible market abuse. The bank was repesented in court on Friday when the ODCE's lawyer, Neil Steen, indicated that it had no objection in principle to sharing the documents with it.

The application for inspectors is due to come before Mr Justice Kelly next Wednesday, when a date is likely to be fixed for a hearing on the application to appoint inspectors.

On Friday, Mr Justice Seamus Noonan rejected INM's bid for a judiccial review to stymie the application. The judge said INM's fundamental proposition that it had a right to be consulted before the ODCE's legal proceedings is "novel and unprecedented" and, as a matter of law, "cannot be sustained".

If INM has an answer to the concerns raised by the ODCE, that may mean, when the application is actually heard, that inspectors will not be appointed, he said.

Public interest

The court could not take cognisance, at this stage, of any damage INM claimed to have suffered as a result of the ODCE decision to seek inspectors, he also said.

The ODCE application was initiated following its year-long investigation into matters at INM.

The head of the ODCE, Ian Drennan, wants the court to appoint inspectors to investigate various matters about which he has concerns. Those issues arose from protected disclosures by former INM chief executive Robert Pitt and chief financial officer Ryan Preston in 2016 and 2017.

The issues included an alleged data breach at INM; a proposed purchase by INM of Newstalk Radio from Communicorp, a company of INM's major shareholder, Denis O'Brien; and a proposed fee payment by INM to Island Capital, a company also linked to Mr O'Brien.

Mr Drennan said the range of “potentially unlawful conduct” that may have taken place within INM is “extensive”.

INM says it “will consider the terms of today’s decision and the further action that the company might take in the interests of [INM] and its stakeholders”.