18 May 2018 07:00
CHAIRMAN'S INTRODUCTORY STATEMENT AT AGM
Independent News & Media plc ("INM") is issuing this update in advance of its Annual General Meeting which is being held today at 11.00 a.m. in Dublin.
A copy of the AGM presentation will be available on the Group's website after the meeting. At the AGM, Murdoch MacLennan, Chairman of INM, will make the following statement:
As we have previously announced, INM received notice on 23 March 2018 from the Director of Corporate Enforcement (the "Director") of his intention to apply to the High Court for the appointment of inspectors to investigate the affairs of the Company.
The Company has taken the decision to oppose the Director's application and has also brought proceedings seeking judicial review of the Office of the Director of Corporate Enforcement's (the "ODCE's") decision to issue the application to appoint inspectors. The Company's application was heard by the High Court last week, and we await the Court's decision.
I wanted this morning to explain why INM has taken the decision to oppose the Director's application and why your Directors consider that it is in INM's and its shareholders' interests that we do so.
The Board's priority is to do all it can to preserve and protect the interests of INM, all of its shareholders, its employees and the members of its pension schemes.
The Director's application is being made under Irish company legislation that enables the Court to appoint inspectors to investigate the affairs of a company, and to report on those affairs to the Court, if the Court is satisfied there are circumstances suggesting that the affairs of the company have been conducted in an unlawful manner or on other grounds as specified in that legislation.
In August 2017 the Board notified a data security incident to the Data Protection Commissioner. That notification was made in good faith based on the material available to the Board at that time.
On 23 March, with the Director's notice of intention to apply to the Court for the appointment of inspectors, INM received from the ODCE for the first time important new information regarding the previously reported data incident. That new information indicated the possibility of personal data having been put at risk of inappropriate disclosure.
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. 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.
The Board and I take these matters very seriously. We have 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.
The Board is, however, gravely concerned that the appointment of an inspector to INM would have a significantly damaging impact on the Company and all its stakeholders, including its shareholders, employees, members of its pensions schemes, readers and customers. 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.
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; has actively engaged with the Office of the Data Protection Commissioner; has established a formal and Independent Review, chaired by senior counsel and a corporate governance expert, to examine the possible acquisition of Newstalk and related matters; has adopted in full the Report of the Independent Review, and has implemented or is implementing all of the report's recommendations with respect to governance at INM.
Against that background, the Board believes that it is not in the interests of INM that an inspector would be appointed, and does not believe that the appointment of an inspector would be either justified or proportionate in all the circumstances, particularly given INM's co-operation with the ODCE and the fact that the Data Protection Commissioner is conducting her own investigation.
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.
These are matters before the Court so that I cannot say more but please be assured that your Board will continue actively to seek to protect INM and its shareholders' interests on these matters.
In the meantime, the Board will continue to focus on delivering INM's strategy and on the running of the business. I am pleased to confirm that the Group'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. The costs associated with the ODCE, the Data Protection Commissioner matters and restructuring the business will be treated as exceptional charges in the Group Income Statement.
Thank you.