The board of Independent News and Media (INM) was "horrified" that third parties may have had access to the company's data or that journalists' sources may have been compromised, its chairman is to tell shareholders on Friday.
At the company’s annual general meeting (AGM), taking place in Dublin, INM chairman Murdoch MacLennan will say that anybody who facilitated the breach will be made to account for their actions.
The Office of the Director of Corporate Enforcement (ODCE) has applied for the appointment of High Court inspectors to investigate matters at the media group following protected disclosures over an aborted bid for radio station Newstalk, which is owned by Denis O'Brien's Communicorp.
Mr O’Brien is also the major shareholder with INM.
INM has opposed the appointment of inspectors, with Mr MacLennan to tell shareholders that the board is “gravely concerned” that this would have a “significantly damaging impact” on the company and all its stakeholders.
“In considering its legal strategy, the board is acutely conscious that the appointment of inspectors to INM would by necessity result in a very considerable ongoing cost to INM and a continuing requirement to devote substantial resources to dealing with the inspectorate,” he will say.
In its affidavit to the court, the ODCE has also alleged that former chairman Leslie Buckley, a long time business associate of Mr O'Brien, who owns just under 30 per cent of INM, facilitated a third party in removing servers from the company's premises on Talbot St, Dublin, for "interrogation".
“The board is horrified at the prospect that third parties may have had access for an improper purpose to data held by INM which relates to, or concerns, INM’s employees or others. If it has occurred, this is entirely deplorable,” Mr MacLennan will say.
“The board believes that any person who facilitated or exploited such access should be required to account fully as to how and why they obtained access to such data, for what purpose and what use was actually made of such data.
“The board is particularly concerned by the suggestion that data maintained by journalists for the purposes of their professional activities might have been accessed for any improper purpose.
“The board considers the integrity and protection of journalist sources and inquiries a foundation stone of the operation of a free and effective press and is committed to protecting those fundamental principles.”
Mr MacLennan will remind shareholders that INM has appointed Deloitte to conduct a full investigation and “we will continue to co-operate fully and actively with the ODCE and with the Office of the Data Protection Commissioner as we have for the last 12 months”.
Mr MacLennan will also say that INM has a “strong and highly competent and experienced board”.
“The board has recently been re-constituted with the appointment of four new directors, including myself, following a number of departures.
“The board has sought independently, diligently and in good faith to deal with the ODCE investigation and all related matters for over a year now. During that period, INM has responded to 14 requests from the ODCE for the production of books and records.”
Mr MacLennan will tell shareholders that the board is of the view that the appointment of inspectors would not be “either justified or proportionate in all the circumstances”.
“Let me tell you this: if there was any wrongdoing in the past it was done without the knowledge or approval of the board, and the board is prepared to take such steps as are necessary to protect INM’s interests and to obtain redress from third parties if advised that it is appropriate to do so,” he will say.
Separately, Mr MacLennan is to inform shareholders that the company’s trading performance year to date “continues in line with market expectations”.
“This is despite the challenges from the red weather warning in March which had a negative impact on the ability to get newspapers into shops, and higher declines in digital advertising than expected,” he will say.
