Watchdog takes legal action against INM chairman Leslie Buckley

ODCE stepping up investigation into corporate governance at newspaper publishing group

Independent News & Media chairman  Leslie Buckley  at the company’s AGM in Dublin earlier this year. Photograph: Dara Mac Dónaill

Independent News & Media chairman Leslie Buckley at the company’s AGM in Dublin earlier this year. Photograph: Dara Mac Dónaill

 

The State investigation into the newspaper publishing group Independent News & Media (INM) has been stepped up significantly. The State’s corporate law watchdog has within the past week used his powers under company law to source material from INM’s chairman, Leslie Buckley.

The Director of Corporate Enforcement (ODCE), Ian Drennan, on Thursday made an application in the High Court involving Mr Buckley, the representative on the company’s board of its main shareholder, Denis O’Brien.

The application was under a provision of the Companies Act whereby the director can seek the determination of the court as to whether certain documents are covered by legal privilege.

The application concerns documents that were given by Mr Buckley to the director under seal and which the director will not be allowed view unless given permission by the court to do so.

Compelling

The law allows the director take possession of documents “notwithstanding that it is apprehended that the information is privileged legal material provided the compelling of its disclosure or the taking of its possession is done by means whereby the confidentiality of the information can be maintained” pending the determination by the court as to whether the information is privileged.

Under the law the application to the court must be made within seven days of the material.

A spokesman for the ODCE would not say whether Mr Drennan has seized other material from Mr Buckley over which privilege had not been claimed.

Evidence was provided to the court on Thursday by Dermot Morahan, a legal expert in Mr Drennan’s office. It is understood Mr Buckley was represented in court but made no submission. The matter is due back before a judge next month.

Mr Justice Peter Kelly, the president of the High Court, made an interim order on Mr Drennan’s application.

In a statement, INM said it “notes” the action taken against its chairman “in relation to certain documents held by Mr Buckley”.

‘No comment’

“INM, which was not a party to this court application, has co-operated fully in supplying the ODCE [Mr Drennan’s office] with all the information it has requested and has no further comment to make at this point in time,” said the company.

When asked to comment on the regulator’s taking of documents from him personally, Mr Buckley told The Irish Times he has “no comment to make”.

The court action will be viewed as a serious escalation of the investigation by the ODCE into corporate governance at INM. The investigation was sparked by a whistleblower complaint about Mr Buckley made by former chief executive Robert Pitt, who has since left INM.

Mr Pitt and Mr Buckley originally fell out over an aborted bid by Mr O’Brien to sell Newstalk to INM. Mr Pitt last year refused to meet Mr O’Brien’s asking price for the loss-making radio station, leading to the row with Mr Buckley.

After a board investigation failed to quell the disagreement, Mr Pitt took his complaint to the ODCE.

Reams of documents

The watchdog has sought and received reams of documents from INM, and has since widened its investigation of the complaint against Mr Buckley to also take in a “potential breach of personal data” at the group.

INM has confirmed it notified a “potential breach” to the Data Protection Commission in August, which recorded the matter, as it was notified to the regulator, as a technical “non-breach”.

The ODCE can require a company to produce documents if there are circumstances suggesting that the company’s affairs were conducted with intent to defraud, were conducted unlawfully, or were conducted in a way that was unfairly prejudicial to some of its members or creditors. As part of these powers the office can direct the production of relevant documents from persons whom it believes are in possession of them.