O’Brien ‘may have got insider INM data’

Watchdog continues bid to send in inspectors

BILLIONAIRE businessman Denis O’Brien may have been ‘passed insider or confidential information’ by a former chairman of Ireland’s largest newspaper group, Independent News and Media, the High Court has heard.

The Director of Corporate Enforcement, Ian Drennan, raised the suspicion in a written statement to the court as part of a bid to send inspectors into INM.

Yesterday, INM launched a rearguard action aimed at striking a ‘knockout blow’ to Mr Drennan’s case, branding the Office of the Director of Corporate Enforcement’s inspection bid a ‘bolt out of the blue’ that’s already ‘done untold damage’ to the company and left a ‘sword of Damocles’ hanging over it.

Some of the damage done to the newspaper group is irreversible, Paul Gallagher SC, for INM, Suspicion: Denis O’Brien told the court. This damage included the media company’s share price dropping by over 14% after the ODCE first launched its case on March 23, Mr Gallagher, who is a former attorney general, told Judge Séamus Noonan.

But Mr Drennan stated in one affidavit that ‘INM’s share price has been falling for a while’ anyway, the court heard.

The ODCE has taken INM to court ‘on the express basis of corporate governance concerns, both in the past and on an ongoing basis’, the court heard.

Mr Gallagher argued that instead of going to court, the ODCE could simply have sought answers from INM that could have ‘allayed’ its concerns. He insisted: ‘We say INM has corporate governance procedures that satisfy all of the requirements, that they are of a very high standard.’

Meanwhile, in ‘protected disclosures’ made by two of INM’s most senior executives, it was suggested that the former chairman, Leslie Buckley, may have ‘brought inappropriate pressure to bear’ regarding a proposed purchase of Newstalk radio by INM, the court heard.

Newstalk is owned by Mr O’Brien’s Communicorp group.

Mr Gallagher said there was an allegation ‘that Mr Buckley passed insider or confidential information to Mr [Denis] O’Brien’. Mr O’Brien owns a 29.9% stake in INM. Mr Gallagher said the media group had already been subjected to a ‘very intrusive’ investigation by the ODCE for over a year.

If inspectors are ultimately sent into INM’s offices, they would have ‘enormous powers’ as they can ‘come in and can ask questions… it goes into the operations of the company and becomes very detrimental to how it conducts its business,’ Mr Gallagher told the court.

The inspection bid was ‘extremely damaging to the Independent as a media company, in whom [the] trust of its employees and of the public is of paramount importance,’ he said. Sam Smyth, a former Irish Independent columnist, who now writes a column for The Irish Mail on Sunday, observed from the back of the court.

The case continues.

‘Bolt out of the blue’