An external corporate governance review of an ongoing boardroom battle at Independent News & Media (INM) has made no definitive finding on the central issues, because of a major conflict between the submissions from chairman Leslie Buckley and those of the company's most senior executives, it is understood.
INM's board in December commissioned the review following the row between Mr Buckley and the chief executive, Robert Pitt, over how much to pay for Newstalk, a radio station owned by Denis O'Brien's Communicorp.
Mr Pitt did not want to meet the valuation sought by Communicorp in the aborted deal. He subsequently fell out with Mr Buckley, who represents Mr O’Brien on INM’s board. He made a complaint to the board and later also made a whistleblower complaint to the State’s corporate watchdog.
The external review of the row was recently delivered to INM's board. It did not come to a substantive determination on the Newstalk issue because of a gulf between Mr Buckley's position on one hand, and the submissions made by Mr Pitt and Ryan Preston, the chief financial officer, on the other hand.
Mr Preston is understood to have also made a protected disclosure internally at INM over the circumstances surrounding the Newstalk row.
It is believed that the nature of the review that was commissioned did not give the reviewers – senior counsel David Barniville and Northern Ireland accountant Stephen Kingon – enormous scope to effectively cross-examine any conflicting submissions.
With the submissions of both sides so hard to reconcile, the review could not reach a definitive conclusion on the overall falling out over Newstalk.
Unresolved
The row is still effectively unresolved, and the focus will now shift to an investigation by the Office of the Director of Corporate Enforcement (ODCE), which has ordered INM to turn over its records related to the proposed Newstalk deal.
INM declined to comment last night, when asked to confirm that the review had reached no substantive conclusions. The review made a number of corporate governance recommendations, which the company is expected to adopt.
The row over Newstalk and corporate governance issues at INM is expected to overshadow the company’s annual general meeting in Dublin on Wednesday, when Mr Buckley and Mr Pitt will face shareholders.
Re-election
In particular, interest will focus on whether Mr Pitt formally opposes the re-election of Mr Buckley as chairman. He has indicated he may oppose some of the resolutions being put to shareholders. Glass Lewis, a shareholder advisory group, says this “directly relates” to Mr Buckley’s position.
It is understood a routine INM board meeting was held in Dublin on Tuesday night ahead of the meeting. The company is seeking three new independent directors to bring it into line with corporate governance rules.
INM is also scheduled to release its interim results on Wednesday, ahead of the agm. INM issued a profit warning on July 19th, in which it blamed costs associated with the external review and meeting the demands of the ODCE, as well as the falling circulation and advertising numbers that are plaguing the wider newspaper industry.
