INM battens down the hatches as storm becomes a typhoon

In the weeks following Independent News and Media (INM) chief executive Robert Pitt's 2016 whistleblowing over the conduct of chairman Leslie Buckley, the company's major shareholder Denis O'Brien moved to comfort his lieutenant.

“Leslie. This storm will pass,” O’Brien texted him. “I know it is awful for you... but we need to play the long game. This will put pressure on the two malcontents... Ultimately we have to get them out and pay them. Best regards. Denis.”

Almost 18 months later, it’s fair to say the storm has intensified and there is now a full blown typhoon barrelling down on Independent House. Buckley, who is O’Brien’s associate, is under fierce scrutiny following a High Court affidavit filed by the State’s corporate watchdog.

There are numerous strands to the controversy but the kernel of Pitt’s protected disclosure is the suggestion that Buckley at various times acted in the interests of O’Brien rather than all shareholders, as is required by law.

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On Monday, the Office of the Director of Corporate Enforcement (ODCE) went to the High Court to seek the appointment of inspectors to investigate. INM sought a judicial review and a hearing is to take place next month.

ODCE director Ian Drennan is claiming Buckley told senior INM executives the company should be run so as to maximise returns for O'Brien and the second biggest shareholder Dermot Desmond.

Buckley is also accused of facilitating the removal of INM servers to another jurisdiction, where data related to journalists, former company executives and senior counsel who acted for the Moriarty tribunal was “interrogated” by six companies.

Drennan’s affidavit claims Pitt was informed of this by the company’s IT director Gerry Wilde, who was so perturbed by goings on that he asked Pitt to take a walk with him on Talbot St rather than talk about it in the office.

The controversy even reached Leinster House, with Minister for Communications Denis Naughten under pressure after it emerged he told an INM lobbyist he was likely to refer INM's proposed takeover of Celtic Media to the Broadcasting Authority of Ireland. This was relayed to O'Brien, two months before it was made public, the affidavits allege, raising concerns that Naughten imparted "inside information".

All this led to one of INM’s biggest shareholders floating the idea of the company using some of its €90 million cash pile to buy back Denis O’Brien’s almost 30 per cent stake.

Beef exports

The air around Leinster House has the whiff of an election coming down the tracks with the relationship between Fianna Fáil and Fine Gael growing increasingly fractious.

The confidence and supply arrangement propping up the Government expires after the next budget and, although Fianna Fáil has expressed no desire to renew the vows, Minister for Finance Paschal Donohoe ruled out a “giveaway budget” in October.

Pointing out that loose spending would overheat the already fast-growing economy, Donohoe signalled that a spending increase of €2.6 billion is already required to meet budget and policy commitments already made. That doesn’t leave much from the €3.2 billion of fiscal space for 2019 already signalled by his department.

Of course, a lot can change in six months but, for now at least, Donohoe seems to be resisting the urge to placate the electorate, focusing instead on the significant downside risks to the economy from Brexit, with exporters chiefly in the firing line.

Figures this week showed the value of exports fell by 12 per cent to €10.9 billion in February while imports rose marginally to €6.9 billion, resulting in a trade surplus for the month of just under €4 billion, down 28 per cent on the previous month.

In better news, Chinese food authorities are set to approve Irish beef exports to China, opening up a potentially huge market within the next few days, ending the freeze-out in place since the BSE crisis.

Meanwhile, the UK is still trying to come up with an acceptable solution to the border question. Reports in Britain suggested Downing Street’s latest proposals were subjected to “a systematic and forensic annihilation” by the EU this week. Ouch.

Housing squeeze

Construction companies in the Republic these days are like publicans during a drought.

Things are so good for them that builders are warning of a looming skills shortage as new figures showed the industry is continuing to expand on the back of the State’s housing squeeze.

Housebuilding drove a sharp increase in activity in the sector in March despite disruption caused by heavy snow, and the Construction Industry Federation called on the State to support the recruitment of apprentices and students.

Separately, the founders of Cairn Homes received a share allocation of €61.4 million in 2017 after a sharp rise in revenues and earnings stemming from the shortage of housing. It earned profits of €6 million in 2017, turning around a €2.8 million loss the previous year.

Cairn has also sold 48 homes at Glenheron, a development in Greystones, Co Wicklow, for a total of €25.15 million, in just one day. Buyers paid €435,000 for three-bedroom semi-detached houses, between €495,000 and €510,000 for four-bedroom homes, and from €550,000 to €700,000 for detached dwellings.

The building materials market is also getting a new player following the acquisition of Belfast-based Lagan by UK construction materials group Breedon for £455 million. This is the first time Breedon has invested outside Britain, but it insisted Brexit was not a factor.

Elsewhere, CRH is keeping the prospect of a partial or full New York listing of its key US division under review, its chief executive Albert Manifold said in an interview with The Irish Times.