Leslie Buckley’s INM reign ends as it started, in the middle of a storm
Veteran departs with INM finances bolstered and corporate governance reputation damaged
Leslie Buckley who stood down as INM chairman during the group’s egm at the Alex Hotel, Dublin. Photograph: Brenda Fitzsimons
Leslie Buckley’s final outing as the chairman of Independent News & Media (INM) on Thursday was a strangely muted affair in the end.
Buckley, the representative of Denis O’Brien, INM’s biggest shareholder, called an egm to facilitate the election of four new directors to bring the company’s board composition back into compliance with governance guidelines.
Outside the Alex Hotel, where the meeting started at 11am, the snow-covered streets were deserted as Dublin battened down the hatches in anticipation of the angry arrival that afternoon of Storm Emma.
Inside the hotel, however, things were uncharacteristically quiet at the INM meeting. Buckley oversaw the election of the new directors in front of the handful of shareholders who had trudged through the snow.
He then resigned as chairman of the company, a move that had been flagged last month when the egm was called. His exit comes in the midst of an investigation of INM by the State’s corporate watchdog, the Office of the Director of Corporate Enforcement (ODCE).
And that was that. Given the intensity of the corporate turmoil that has swirled around INM and Buckley for the past 18 months, such an anti-climactic finale to his reign, in a deserted hotel basement in a deserted snow-bound city, seemed unworthy.
If Buckley felt aggrieved at walking away from INM effectively under a dark cloud due to the ODCE’s investigation into his conduct, he didn’t let on. He was gregarious and chatty before the meeting commenced, laughing and joking with his advisers and with journalists from other news groups.
“Well done for getting here. But you’re too late, the meeting is over,” he teased one journalist – deadpan – who had just arrived at the hotel after an hour-long walk through the snow.
As formal proceedings commenced, apart from INM’s depleted board of directors, there were barely 20 people in the room. And most of those were company advisers and media. There were fewer than 10 shareholders present for the egm.
Two INM directors were also absent. Allan Marshall, who along with Buckley stepped down from the board yesterday. And Paul Connolly, who like Buckley is a nominee of Denis O’Brien and is considered a contender to become the group’s next chairman,
Both were marooned in London due to the weather.
“These appointments will restore the board to full strength,” Buckley told the meeting. Within five minutes, all four were duly elected on the strength of votes cast in advance by shareholders, including O’Brien and Dermot Desmond, the second-largest shareholder with about 15 per cent.
The formal business of the meeting over, Buckley thanked his colleagues and also noted the “financial turnaround” that had taken place under his watch at the group, which is due to release full-year results on Friday.
INM is indeed profitable and cash rich – analysts expect it to report earnings of about €25 million next week – but it has also warned that its profits will be hit. It blamed market conditions, and also legal costs associated with the ODCE’s investigation of the business.
Buckley then acknowledged the corporate strife that has assailed INM ever since The Irish Times revealed in November 2016 that he had fallen out with former chief executive Robert Pitt, over how much to pay Denis O’Brien for Newstalk, the national radio station.
That proposal was later abandoned, before Pitt complained about Buckley to the ODCE, which is now investigating a range of corporate governance matters related to his stewardship of INM’s board.
These include why Buckley facilitated outside corporate security and IT experts in gaining access to the newspaper group’s sensitive internal systems. The ODCE wants to know who paid for it – INM did not – and why.
The National Union of Journalists has expressed concern that journalists’ emails and sources may have been compromised. INM has declined to assuage those concerns.
Buckley admitted at the egm that his five-and-a-half years as chairman – his second stint on the board after a previous time as a non-executive director prematurely ended in 2011 as part of O’Brien’s battle for control with the O’Reillys – were “a challenge”.
“As a high-profile media group, I am cognisant that sometimes we, too, can become the news,” said Buckley. “Whilst I might not have always agreed [with the coverage of INM by other newspapers], I value a good exclusive and the hard questions that follow. It hasn’t been dull.”
Buckley revealed that a strategy report by EY is now ready to be presented to the newly-enlarged board of INM at its next meeting, which is expected to take place in the coming weeks.
“It gives a pathway to renewed growth, and to reconnecting with readers,” he said Buckley.
He then concluded the egm and walked off stage. Buckley has left INM. He has also left his mark.
It is understood by this newspaper that, when INM was trying to recruit new directors recently, some of those approached expressed an unwillingness to join while the corporate governance matters around Buckley were unresolved.
It is further understood that in the weeks before Buckley announced last month that he would be stepping down, some other INM directors had become uneasy with his stewardship.
At the time, Buckley was opposing an ODCE High Court bid to review certain documents held by him.
He cited legal privilege as his reason for not disclosing certain emails between him and his advisers pertaining to the ODCE investigation. A judge later agreed that the 11 documents were covered by privilege.
When asked after Thursday’s egm if the controversy that surrounds INM, and the issues at the heart of the ODCE investigation, played a significant role in his decision to walk away from the board, Buckley denied that they had.
“Absolutely not,” he insisted.
Even though Buckley has departed INM, the ODCE’s investigation remains ongoing. Last month, Buckley filed a further High Court affidavit as part of the since-resolved ODCE bid to review documents over which he claimed privilege.
In that affidavit, Buckley reveals that he believes that “both INM and I have provided all documentation and information requested of us to date”. This suggests that Buckley has answered the series of questions that were put to him by the ODCE last August.
After it began its probe on foot of a whistleblower complaint by Pitt, the State watchdog quickly established that Trusted Data Solutions, a UK technology company, was given access by Buckley to INM’s internal systems. INM’s management team did not provide the access.
The ODCE’s August missive requested that Buckley explain what he knew about this, why it happened, who else knew about it, and who paid for it.
When asked by The Irish Times on Thursday if Denis O’Brien or a company connected with him had paid the bill for the outside contractors to gain access to the newspaper publishing group’s IT systems, Buckley declined to comment on the basis that the ODCE investigation was ongoing.
When asked a similar question, Michael Doorly, who has replaced Pitt as chief executive, declined to comment on the same basis.
Denis O’Brien, who owns 29 per cent of INM but does not sit on its board or have an executive role, declined to comment when The Irish Times asked him at the recent World Economic Form meeting in Davos to confirm if he had paid the bill.
Buckley’s affidavit also sheds further light on the role in the whole affair of John Henry, which had been queried by the ODCE.
A former Irish Army officer who later entered the security industry, Henry has been providing bodyguard services to O’Brien’s telco, Digicel, in Haiti for many years.
Buckley says that Henry provides him with “a range of security services, including security consultancy and training, personal security, corporate security, and security services to protect against cyber attacks”.
Buckley maintains that he was running a “cost reduction exercise” at INM, and that he asked Henry to advise him. He says Henry put him in touch with Derek Mizak, another IT security expert. This preceded TDS gaining the access to INM’s systems that has so worried the NUJ.
Buckley maintained in his affidavit that when the ODCE asked its August questions, he realised he would need help explaining the circumstances surrounding the “cost reduction exercise”. He says he forwarded Henry emails from his solicitors “with a view to discussing it with him”.
It is uncertain whether the ODCE, weakened as it is following its botched handling of the investigation into Seán Fitzpatrick and Anglo Irish Bank, will ever get to the bottom of events at INM.
But is clear that the whole affair has cast a pall over Buckley’s time at the helm of INM’s board, which may well be his last term overseeing an Irish publicly-listed company.
As he walks away from the publishing group, many will conclude that the veteran’s reign has created more questions than answers.