Sale of O’Brien’s Newstalk is at centre of storm

AT the centre of the alleged data breach lies the sale of the loss-making Newstalk radio station, which is being investigated by the Office of the Director of Corporate Enforcement.

Communicorp, owned by billionaire businessman Denis O’Brien, was trying to sell the station to Independent News & Media, in which Mr O’Brien is the largest single shareholder.

The ODCE is now seeking to have inspectors examine whether a conflict of interest existed in the attempted sale, as Mr O’Brien has an interest in both Newstalk and INM.

According to reports, court papers filed by the ODCE note that valuations of how much the station was worth ranged between €10million and €35million, depending on the party involved.

Former INM chief executive Robert Pitt, whose protected disclosure to the ODCE began a year-long investigation into INM, initially valued Newstalk at €12million.

INM’s own advisers, Davy, believed Newstalk was worth €14million at most, according to reports on the ODCE’s affidavit.

Those close to Mr O’Brien, who wanted to sell the station to INM, valued it much higher. IBI Corporate Finance, which was adviser to Mr O’Brien’s Communicorp, suggested the station was worth between €30million to €35million.

Mr Pitt told the ODCE that he had no problem in principle with the sale but was concerned about the high price. He told the ODCE he attended a meeting with INM chairman Leslie Buckley, who is alleged to have said that a low valuation of €14million for Newstalk was ‘insulting’ to Mr O’Brien.

A spokesman for Mr Buckley told the Irish Independent this week that it was ‘not appropriate to comment as a review process is ongoing’. Ryan Preston, INM’s chief financial officer, also attended a meeting at which Mr Buckley is alleged to have urged INM to buy Newstalk at a higher price range, according to the ODCE. According to the ODCE, Mr Preston’s disclosure corroborated the disclosure made by Mr Pitt.

Independent reviewers David Barniville SC and Stephen Kingon later noted ‘a stark conflict of evidence’ between Mr Pitt and Mr Preston on the one side and Mr Buckley on the other. ‘In those circumstances, we have been unable to reach a conclusion as to whether any “wrongdoing” or “potential wrongdoing” has occurred in connection with the Newstalk discussions,’ the reviewers said in their report. ‘However, it is important to note that no agreement was reached for INM to acquire Newstalk.’