The controversy arose when the former INM chief executive who resigned last year, Robert Pitt, and its former chairman, Leslie Buckley, who resigned in recent weeks, clashed over the value of a potential acquisition of Newstalk, the national radio station.
The full extent of the row was only laid bare when it emerged that Mr Pitt used whistleblowing legislation to complain as a dispute inside the media firm raged over the potential acquisition.
About then, INM referred to “an issue” between its CEO and chairman but did not identify the potential acquisition, saying Mr Pitt raised the issue with the company’s senior independent director. INM then disclosed last year that the State’s corporate watchdog, the Office of the Director of Corporate Enforcement (ODCE), asked it for documents involving plans INM had to acquire Newstalk.
The significance of the row lay in that Newstalk is owned by the privately-held Communicorp, which is controlled by billionaire businessman Denis O’Brien.
With a stake of just under 30%, Mr O’Brien is also a significant shareholder in INM.
The row involved the large difference between the highest and lowest valuations (from €10m to €35m) that INM should pay for a privately owned firm. INM is a stockmarket-listed firm whose owners include public shareholders.
The use of whistleblowing legislation by the CEO of any company to complain over a corporate governance issue is a significant event. It was all the more serious in INM’s case as it is a stockmarket- listed company with external shareholders, including public pension funds.
It takes on a more serious hue again because the company is a major media firm which has other government regulatory obligations. INM has long been under the spotlight from opposition TDs because of the significant business activities of Mr O’Brien in the State.
The latest allegations of unauthorised breaching of emails or data of 19 people who worked or were in the past connected with INM has raised the heat considerably.
The ODCE has applied to the High Court for an inspector to be appointed to investigate the matters. The hearing has been set for April 16.
In Ireland, such an application is a rare event. Only once before in its 15-year history has the ODCE applied for an inspector to be appointed to investigate a stockmarket-listed firm.
INM shares were little changed yesterday but have lost over 25% of their value in the past year. However, the company had over €91m in cash at the end of last year.
Philip O’Sullivan, chief economist at Investec Ireland, said the cash pile has helped support the company shares but that uncertainty over the final bill could weigh for some time.