One can only wonder if the threatened closure of the London Independent newspapers, is a ruse to deflect attention away from a scandal involving non-executive director Brian Mulroney? Readers will remember that Independent, which publishes South Africa’s Star and Cape Argus, is in the process of being restructured amidst a controversy which refuses to go away.
Denis O’Brien, the telecoms billionaire who most recently bailed out the group has introduced a resolution calling on shareholders to stop a €100,000 annual payment to a company owned by Mulroney. Mulroney is under investigation by the Canadian police because of a bribery and kickbacks scandal involving German arms-dealer Karlheinz Schrieber.
O’Brien has also called on shareholders to cancel a €300,000 annual payment to former chief executive Sir Anthony O’Reilly in respect of his position as president emeritus of the firm. The current board under Hillary says O’Reilly is not entitled under contract to such a payment, but will argue that the resolution is moot.
The company’s board, on which O’Brien has minority representation, is also likely to refuse to put to the AGM O’Brien’s call for a detailed schedule of all board member expenses since the start of 2000 to be prepared by a firm of independent accountants and circulated to all shareholders.
There was no comment from O’Brien, the marauding minority shareholder who is apparently also seeking at the AGM to remove company chairman Brian Hillary and to replace senior independent director Baroness Margaret Jay, a tory conservative. One can only hope shareholders will come to their senses and realise the O’Reilly dynasty is over and the only way to save the company is to move on with doing business, which is about printing newspapers, not investing in Wedgewood crystal, 18 Century Mansions and chandeliers.
One has got to feel a little sorry for the fact cats at Independent right now. No sooner had they restructured the company to spin off their South African billboard advertising operation with the renamed INM outdoor, when the man who owns 26% of the company Denis O’Brien blocked the sale by calling a shareholders meeting. The result could put a permanent end to the O’Reilly dynasty. In order to bankroll the conglomorate, and keep titles such as Independent and Independent on Sunday afloat, the O’Reilly’s have to pay banks some 50 million Euros this month, which would have come from the sale of INM Outdoor.
It appears billionaire investor O’Brien wants to get rid of the O’Reilly shareholding once and for all by masterminding a collapse of the company which would allow him to cherry-pick assets. Needless to say, INM CEO Gavin O’Reilly is accusing O’Brien of having no interest in the core-business, which is surely newspapers and the newspaper industry?
Although the group has some 135 titles, when it comes to business, it is all about baked beans and crystal and O’Reilly whose interests in Heinz and Waterford Wedgewood, no longer amount to anything, will surely realise the time to make an exit is now.
Gavin O’Reilly’s father, Tony is world renowned for taking an Irish brand of yellow journalism worldwide, in an aggressive expansion of interests which blurred the boundaries between what was considered acceptable practice in the industry, and outright manipulation of news — what media critic Noam Chomsky calls the “manufacture of consent”.
Under the O’Reilly’s control, the Independent Group became merely another advertising and publicity department of commerce and real estate which was allowed to dictate and in certain circumstances fabricate news to conform with editorial policies that were driven by a boardroom populated with neo-conservatives and members of the oil industry.
Full story can be found on the Guardian
IT’S amazing what difference a week can make in the lives of today’s corporate executives. Take the changing fortune of deposed INM board member Ivan “The Terrible” Fallon, or the fate of media tycoon, Tony O’Reilly, replaced by son Gavin?
After the INM night of the long knives, with one other O’Reilly clan member already tipped to walk the plank, Gavin appears to be the only O’Reilly member with any staying power on the slimmed down board, and one could be forgiven for enjoying a bit of schadenfreude as this palace putsch plays itself out.
The move, labelled as a form of weightwatchers for executives in the media world, will apparently address “trenchant attacks” by dissident shareholder and telecoms billionaire Denis O’Brien who last year commissioned a report which claimed the INM board had too many members allied to O’Reilly.
Tony O’Reilly, a controversial figure has been embroiled in a bitter war of words with O’Brien, said he will retire as chief executive and as a director of the board on 7 May – his 73rd birthday
O’Reilly is still the largest individual shareholder in INM after the Bank of Ireland, with 28.5%, and has been the strategic driving force behind the company for the past 36 years.
His son Gavin, who is currently chief operating officer, will maintain his reign on power, by becoming chief executive-designate with immediate effect and will thus succeed his father in May.
O’Reilly is apparently eager to bury the hatchet with arch-rival O’Brien who will be given three seats on a slimmed down board of directors.
However, such moves have not quelled criticism of the inclusion of Canadian Brian Mulroney, a long-time O’Reilly supporter at the centre of a storm surrounding a bribery and corruption scandal, who is the subject of an international inquiry into financial dealings whilst in office, where he was once the progressive conservative party Prime Minister before stepping down. Mulroney is also accused of taking bribes from German arms-dealer Karlheinz Schrieber, and more recently, of encouraging sponsor-representation at board-room level in INM’s many overseas operations.
South African media analysts have entertained the public with rumours that INM could be selling off its local operation, but there is very little chance that O’Brian will be giving up his stake in the market. Rather, we are likely to see a complete meltdown before anything happens as the group fails to heed warnings by the public to come clean on the Mulroney scandal.