Insurers are put ‘on notice’ of INM costs
INDEPENDENT News & Media (INM) has “put its insurers on notice” of the potential costs of responding to a move by the Office of the Director of Corporate Enforcement (ODCE) to seek High Court permission to appoint inspectors to investigate the affairs of the company.
The INM board is also appointing a special committee to deal with the situation, chief executive Michael Doorly told a group of staff at a meeting yesterday.
The ODCE made the dramatic move to seek the appointment of High Court inspectors last Friday, prompting an emergency meeting of the INM board on Saturday afternoon.
The High Court is due to hear the case on April 16, when INM will have an opportunity to seek to oppose the appointment.
Yesterday, at a previously scheduled meeting of around 70 of INM’s senior managers to discuss strategy, Michael Doorly addressed what he called the “elephant in the room”.
“It’s a pain (but) we need to get on with the day job. I think it can be ring-fenced and we can get on with the job,” he said.
If inspectors were to be appointed, there would be a “material cost” and the company has notified its insurer of the situation, he told staff
Last year, INM cited the high cost of engaging with an earlier ODCE process among a number of factors behind lower-than-anticipated profitability.
“Inspectors would require resources, there would be costs involved,” Mr Doorly said.
That’s likely to include hiring third parties to liaise with any inspectors – including providing them with information – and the process might run for one or two years, he said.
But, he insisted that the fact that action had been initiated by the ODCE was not evidence that wrongdoing had occurred.
“We are an awful long way from any finding that anyone has broken any law,” he said.
It is understood that the ODCE wants the High Court to appoint inspectors to investigate whether several companies had access to INM’s information-technology systems following a suspected data breach at the company in late 2014.
Yesterday, shares in INM – Ireland’s largest media company – closed up just under 1pc at 9.38 cents each, recovering some of the ground lost during a sharp fall on Monday.
It is understood the ODCE has submitted an affidavit (court statement), running to several hundred pages, in support of its application to have inspectors appointed.
The ODCE has been investigating the company since late 2016, when it is understood former CEO Robert Pitt made a protected disclosure under whistle-blowing legislation raising corporate governance concerns.