INDEPENDENT NEWS & Media has appointed lawyer James Osborne as its new chairman despite the decision of Denis O’Brien’s two representatives on the board to vote against his appointment.

Mr Osborne succeeds Brian Hillery, who has stepped down from the board. His appointment was recommended by IN&M’s nominations committee following a recent search process led by London recruitment specialist Lamarck Ltd.

It is understood that Paul Connolly and Lucy Gaffney, who represent Mr O’Brien’s interests on the board, voted against Mr Osborne’s appointment at a board meeting in London yesterday. This is the latest manifestation of tensions between Mr O’Brien, IN&M’s biggest shareholder with a 21.6 per cent stake, and the company and family of Sir Anthony O’Reilly, which owns about 14 per cent of the business.

In July, Mr O’Brien wrote to Mr Hillery calling on him to step down, along with chief executive Gavin O’Reilly. In his letter, Mr O’Brien said “the very existence of IN&M” was under threat. These claims were rejected by Mr Hillery.

Mr Hillery had been a director of IN&M since 2003 and non-executive chairman since 2004. He signalled his willingness to retire from the post late last year.

Mr Osborne is also non-executive chairman of Eason & Son bookstores, a position he took up in August 2010. There was a suggestion yesterday of a potential conflict of interest for Mr Osborne in holding the chairmanships of the Irish media company and Eason.

IN&M owns Newspread, a newspaper and magazine distributor that competes with EM News Distribution, a joint venture between UK-based John Menzies and Eason. It is understood that as Menzies has operational control of this joint venture, the INM board felt there was no conflict for Mr Osborne.

Mr Osborne is a former managing partner of A&L Goodbody Solicitors and remains a consultant with the group. He is the current senior independent director at Ryanair and a non-executive director of James Hardie Industries.

Mr Osborne was chairman of former Irish-listed security, cleaning and recruitment company Newcourt when it was put into receivership in mid-2009 by Bank of Ireland after failing to restructure its €36 million debt.

“I am delighted that the board has approved James Osborne’s appointment,” Mr Hillery said yesterday. “He brings a wealth of experience and skill to the board.”

No comment was available yesterday from Mr O’Brien.