The platform from which former INM chairman Leslie Buckley has launched “a nuclear attack” on two court-appointed inspectors over their investigation into certain matters at INM is “built on thin air”, the High Court has been told.
The inspectors do not allege Mr Buckley’s application to have them withdrawn on grounds of alleged objective bias is “self-serving” but they do contend he has been “selective” in his treatment of material gathered by them so far in their investigation, Cian Ferriter SC, for the inspectors, said.
The “self-serving” allegation had been made by former INM chief executive Robert Pitt, not by the inspectors, he said.
Nessa Cahill SC, also for the inspectors, said they dispute Mr Buckley’s claim that a “draft statement” circulated by them to Mr Buckley and others had misrepresented Mr Buckley’s evidence concerning his communication with businessman Denis O’Brien as INM’s major shareholder.
Mr Buckley had particularly criticised a paragraph where the inspectors stated: “There is no dispute, and in giving evidence to us, Mr Buckley readily acknowledged that he provided Mr O’Brien with information that was confidential to INM and that certain of such information was undoubtedly price-sensitive”.
Mr Buckley had stated he should have the opportunity to give evidence in relation to whether such information contained information confidential to INM and, in some instances, contained inside information.
In an affidavit, Richard Fleck said the inspectors’ draft statement noted Mr Buckley had also told the inspectors that, when providing information to Mr O’Brien, he had “absolute confidence” Mr O’Brien recognised he was receiving such information as an insider and would not use the information for his own financial advantage, such as by buying or selling shares in INM.
Price-sensitivity
Mr Fleck said the inspectors accepted that whether information is price-sensitive in a legal sense is an objective test under article 7 of the Market Abuse Regulations, the inspectors had not reached any view on that and they did not intend to convey a conclusion on the issue in their draft statement.
The issue of whether certain communications included inside information will be pursued in further hearings and the inspectors intend to get expert evidence on the matter, he added.
Ms Cahill said the inspectors also rejected Mr Buckley’s complaints about how the draft statement treated other issues subject of the investigation. Those included issues concerning Mr Pitt’s protected disclosures in 2016 and 2017, the rationale for terminating Mr Pitt’s employment as chief executive and his motivation for making his second protected disclosure in 2017.
Tuesday was the fifth day of the hearing before Mr Justice Garrett Simons of Mr Buckley’s application to have the inspectors withdrawn, or for a direction requiring them recuse themselves, on grounds of alleged objective bias.
The inspectors, Seán Gillane SC and Richard Fleck CBE, strongly deny objective bias and are opposing the application.
Protected disclosures
They were appointed by the High Court in September 2018 on the application of the Director of Corporate Enforcement following his office’s year-long investigation into matters at INM arising from protected disclosures made in 2016 and 2017 by Mr Pitt and former INM chief financial officer Ryan Preston.
Five issues being investigated include the alleged off-site interrogation in 2014 of the data of 19 individuals, including journalists, and Mr Buckley’s communication with Mr O’Brien as a major shareholder in INM.
Earlier on Tuesday, Mr Ferriter argued a reasonable observer would not, from the conduct of the investigation to date, conclude any objective bias on the inspectors’ part. The inspectors are “fair, courteous, reasonable and responsible people” who have made no findings to date or any adjudication on any conflict of evidence.
Mr Buckley’s application must be seen against the magnitude of the inspectors’ task, he said. They have so far assembled more than 3,726 pages of oral evidence, tens of thousands of pages of electronic and other documents, interviewed 36 witnesses and confirmed a process of cross-examination to be embarked upon. They had circulated five draft statements extending to some 300 pages, with extensive footnotes, concerning the five areas of investigation. Those statements, collectively referred to as the “draft statement”, were not intended for publication and were circulated to Mr Buckley and others for the purpose of inviting comment and submissions which could result in amendments, additions or corrections.
The hearing continues on Wednesday.
