Almost eight years after the Office of the Director of Corporate Enforcement received protected disclosures from the chief executive and chief financial officer of Independent News and Media the investigation has reached a crucial juncture.
The report of the two inspectors appointed by the High Court in 2018 to look into the allegations at the request of the ODCE – now called the Corporate Enforcement Agency (CEA) – has been published. Robert Pitt and Ryan Preston’s version of what transpired at the upper levels of the country’s largest media business in 2016 has been upheld. Their concerns related to the conduct and motivation of its non-executive chairman Leslie Buckley.
Crucially, however, the inspectors did not find that Buckley’s actions – whilst in breach of his responsibilities as a director of the company – were done to prefer the interest of the company’s largest shareholder, the businessman Denis O’Brien, over the other shareholders in the company. O’Brien sold his controlling stake in the company to the Mediahuis group in 2019 at a significant loss.
There is however plenty in the report to give rise to concerns about Buckley’s stewardship. A consistent theme is a failure to keep his board and management informed of his actions.
They include the engagement of O’Brien’s private investment company as an adviser on the sale of the company’s Australian assets which was “inconsistent with his responsibilities as a director”. The arrangement was abandoned after Pitt told Buckley it would have to be publicly disclosed.
Buckley also failed to tell the board that he had authorised the removal and interrogation of INM emails by a third party. This resulted in the company being found to have broken the Data Protection Act. He also should not have involved himself to the extent he did, the report finds, in failed negotiations to buy the Newstalk radio station from a company controlled by O’Brien.
The other directors of INM at the time – many from the upper echelons of Irish business – are not spared either. Their response to Pitt’s disclosure was “fundamentally defective” and the conduct of the directors concerned “fell below that to be expected of a director of a public company.”
Many will be tempted to dismiss these findings as venal rather than mortal sins by the standards that pertain in the corporate world. Be that as it may, the picture painted of the way in which some of the affairs of INM were conducted at the time is far from edifying .The report also raises some questions about Ireland’s wider business culture and the standard of governance at board level in Irish listed companies.
It is now up to the CEA to determine if any further action needs to be taken in this case.