The High Court has appointed two inspectors to investigate specified aspects of Independent News and Media plc’s affairs after finding circumstances suggesting unlawful conduct, unfair prejudice to members and misconduct connected with the company’s management.
Mr Justice Kelly, President of the High Court, delivered the judgment on 4 September 2018 in an application by the Director of Corporate Enforcement under section 748 of the Companies Act 2014. The company and its named directors opposed the application. The court held that the statutory conditions were met and that an inspection was justified in the public interest and proportionate. It did not determine the underlying allegations as established facts.
The judgment concerned four areas: the 2014 interrogation of company computer data; proposed payments connected with the disposal of the company’s APN shares and a proposed acquisition of Newstalk; the company’s response to disclosures by former chief executive Robert Pitt and former chief financial officer Ryan Preston; and alleged sharing of inside or confidential information. The court said many questions remained unanswered after the Director’s investigation and statutory information demands.
The court rejected the company’s argument that alleged acts by its former chairman, Leslie Buckley, could not amount to the conduct of the company’s affairs because they were individual actions. It considered that he acted with actual or apparent authority as chairman. The judge also said the company’s other inquiries, including a notified Data Protection Commissioner investigation, did not have the same scope or powers as court-appointed inspectors.
The order appoints Senior Counsel Sean Gillane and solicitor Richard Fleck as inspectors. Their remit includes investigating the data interrogation and the company’s response to it; Buckley’s role in the proposed Newstalk acquisition; proposed fees to Island Capital and Paul Connolly linked to the APN transaction; the board’s response to Pitt’s and Preston’s disclosures; alleged sharing of inside and confidential information; and whether specified documents were withheld from the Director. The inspectors may also report on relevant legal or regulatory breaches and matters within the statutory grounds considered by the court.
The court declined to direct a general review of corporate governance or to require a standalone inquiry into compliance with the UK Corporate Governance Code. It gave the inspectors leave to return to court if they considered their remit inadequate. The judgment proposed that the first interim report be furnished to the court by the last day of Hilary Term 2019, subject to submissions.