High Court agrees to appointment of inspectors to INM
High Court has approved the appointment of inspectors to probe concerns over the conduct of the affairs of Independent News & Media (INM).
Their inquiry into a major data breach and other serious matters at the country’s largest media group, which publishes this newspaper, could begin as early as tomorrow.
In a judgment yesterday, the President of the High Court said the appointment was justified and in the public interest. Mr Justice Peter Kelly also said circumstances surrounding two proposed business transactions were “suggestive of an unlawful purpose” directed to the benefit of INM’s largest shareholder, Denis O’Brien.
He postponed the making of final orders until tomorrow to allow INM consider his judgment, which comprehensively found in favour of an application by the Office of the Director of Corporate Enforcement (ODCE). The issue of costs, which are being sought by the ODCE, will also be dealt with at tomorrow’s hearing.
INM had objected to the appointment of inspectors, saying the measure was disproportionate and would have a damaging impact on the company and its employees.
However, Mr Justice Kelly rejected these arguments in a 76-page ruling. “The appointment of inspectors is a serious matter and such a sledge hammer should not be used to crack a nut. What has been disclosed in the evidence before me is no nut,” he said.
“The appointment of inspectors to ascertain the truth of what has allegedly gone on in the company is well justified and is not disproportionate.”
The judge said the corporate watchdog had investigated concerns at INM but “quite a few questions remain to be answered” and ODCE director Ian Drennan considered that nothing less than court appointed inspectors would be able to get to the bottom of matters. The ODCE began its inquiries after receiving a protected disclosure from then INM chief executive Robert Pitt in November 2016.
In it, Mr Pitt alleged he was put under pressure by then INM chairman Leslie Buckley to pay an inflated price for Newstalk, a radio station owned by Mr O’Brien. The deal was ultimately abandoned.
He also raised concerns about a proposal, later dropped, for the payment of a €1m “success fee” to a company owned by Mr O’Brien in connection with the sale of INM’s shares in Australian media group APN.
“Whilst the Newstalk acquisition and the APN transaction did not ultimately lead to any loss to the company, the circumstances surrounding them are certainly suggestive of an unlawful purpose directed to the benefit of Mr O’Brien directly or indirectly and to the detriment of the company,” Mr Justice Kelly said.
A further protected disclosure by Mr Pitt in August last year prompted the ODCE to investigate a major data “interTHE
rogation”, directed by Mr Buckley, where large amounts of data were removed from INM’s premises in 2014 and given to outside companies.
ODCE inquiries subsequently uncovered a list of 19 people, including journalists, whose names are believed to have been used during searches of the data.
Mr Justice Kelly said the “actual purpose” of the data interrogation “remains unclear but is certainly suggestive of the company’s affairs being conducted for a purpose that is unlawful”.
The judge said a free press was a cornerstone of a functioning democracy. “Journalists’ communications have a particular importance in that regard. Thus, allegations of the accessing of journalists’ communications by unauthorised third parties raise issues of particular public interest.”