LAST UPDATE | 4 Sep 2018

THE STATE’S CORPORATE watchdog has been successful in its High Court bid to have inspectors appointed to investigate affairs at Independent News Media (INM).

Mr Justice Peter Kelly made the ruling today, after months of legal wrangling between the Office of the Director of Corporate Enforcement (ODCE) and INM.

The State’s corporate watchdog took the legal action over allegations that the emails of staff members at the country’s largest media group were accessed – without the employees’ knowledge – by a third-party firm.

Appointing inspectors is a “serious matter”, the judge said, and added he had given careful consideration to all of the issues before deciding to grant the appointment of inspectors.

The matter was robustly fought by INM – which owns titles such as the Irish Independent and the Sunday World – which sought to block it with a judicial review which failed earlier this year.

In his ruling, the judge said he was satisfied that it was in the public interest for this matter to be investigated. 

“A free press is a cornerstone of a functioning democracy,” he said, adding that if the data of journalists was accessed in the manner in which it is alleged, this was worthy of further investigation. 

He rejected arguments from INM that the alleged actions of its then-chairman Leslie Buckley were solely alleged wrongdoings of him and not of the company. 

Mr Justice Kelly said that if wrongdoing was done by Buckley in his role as chairman of the board of the INM, then it directly relates to the affairs of the company. 

He also rejected the assertion that the “very survival” of the company would be jeopardised by the appointment of inspectors, adding: “I am sceptical that the mere appointment of inspectors would have such devastating consequences.”

In a statement released this evening following the judge’s ruling, INM said that its board and the company’s management “intend to remain focused on the business and ensuring that the Group’s operations continue, so far as possible, to be conducted as normal”.

Ongoing saga

As explained here, the recent furore was sparked by INM’s ill-fated bid for radio station Newstalk (owned by INM’s largest shareholder Denis O’Brien). In March 2017, the ODCE asked INM to “produce books and record” in relation to the proposed takeover.

As the ODCE’s involvement with INM persisted over the year, the watchdog announced on 23 March that it would be seeking to appoint inspectors.

INM, however, strongly resisted efforts to have inspectors appointed, and failed to block the case following a judicial review in June. 

In an affidavit from ODCE director Ian Drennan, he said that there was a removal of INM’s IT system’s back-up tapes from the company’s premises. According to the affidavit, they were moved to the premises of a company outside of this jurisdiction in October 2014.

Drennan said that INM data was subsequently interrogated over the course of many months.

He said: “During the course of the data interrogation, INM’s data appears to have been searched against the names of various individuals, including, amongst others, a number of INM journalists and two senior counsel.”

The judge said that this was allegedly ordered by then-chairman Buckley and that INM has initiated legal proceedings against him on foot of this. 

Next steps

The judge has appointed two inspectors to investigate INM – Sean Gillane SC and Richard Fleck CBE.

The former is an experienced barrister who previously was lead counsel for the O’Higgins Commission of Investigation into allegations of wrongdoing within the gardaí made by Maurice McCabe.

Gillane was also senior counsel for RTÉ at recent sittings of the Disclosures Tribunal. 

Richard Fleck is a former partner of law firm Herbert Smith, and was a member of the UK Financial Reporting Council. 

Mr Justice Kelly has ordered them to provide a first interim report based on the investigation by April 2019.

There is, however, a temporary stay on the inspectors getting under way pending a further hearing before the judge on Thursday morning regarding costs. 

INM said that its board “will consider the terms of today’s decision and the action that the company might take in the interests of the company and its stakeholders” ahead of that hearing.

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