BAI not to take action on O’Brien INM share
But the distinctions that the BAI are drawing between what constitutes control and substantial influence is the stuff of fairy tales, Seamus Dooley, the Irish secretary of the National Union of Journalists said.
“The distinctions are such that we are now in Alice in Wonderland territory,” he said.
Mr O’Brien holds the maximum number of shares that any individual can hold in a firm without making a bid for the whole company, according to rules laid down by the Irish Takeover Panel.
The BAI met to discuss whether Mr O’Brien’s stake gave him too much influence over the media in Ireland due to his Communicorp radio holding and the fact he has become the largest single shareholder in INM.
The BAI met to discuss “the desirability of allowing any person, or group of persons, to have control of, or substantial interests in, an undue amount of communications media”, it said in a statement.
Denis O’Brien founded Communicorp in 1989.
The company controls Today FM, Newstalk, Spin 103.8 and 98FM, and has a substantial interest in Spin South West and Phantom FM.
Earlier this year he increased his stake in INM to 29.9% and succeeded in ousting the former CEO of INM, Gavin Reilly, ending 39 years of direct control by the family of Tony O’Reilly of Ireland’s largest media group. Mr O’Brien’s stake is greater than that held by the O’Reilly family at the company which owns the Irish Independent and the Sunday Independent newspapers.
Gavin O’Reilly stepped down following speculation that Mr O’Brien would seek to have him removed at the company’s annual meeting in June.
“The authority was obliged to consider the changes in Mr O’Brien’s interests in INM to determine whether the changes amounted to ‘substantial interest’ or ‘control’ as those terms are defined in the Ownership and Control Policy launched in April.
“At its meeting on Jul 23, the authority determined that Mr O’Brien does not control INM. Rather he has a substantial interest in the company, as that term is defined in the policy. In this regard, the authority was not obliged to review Mr O’Brien’s interests in the context of an undue amount of communications media,” the BAI said.
The difference between ‘control’ and ‘substantial interest’ is in the difference between being able to direct the policy of a company and the ability to influence directly or indirectly to an appreciable extent the strategic direction of a company.
Mr Dooley said that the terms used by the BAI themselves acknowledge that a substantial interest can exert control on the companies involved.
“The phrases used in the legislation is an acknowledgement that he can shape policy in these companies.
“We believe that this is control,” he said.
If Mr O’Brien had been found to have had control of INM, he could have been ordered to sell some of his radio holdings.
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