Next Wednesday's annual meeting of Independent News & Media has the potential to be a humdinger. Will the notorious "dissident shareholder" Denis O'Brien dare to turn up or send a crony? After all, he now has more than 25% of the stock and can exercise some negative muscle.
I'd guess that O'Brien is hopping mad because of two moves by INM's board, led by chief executive Tony O'Reilly. As Caitlin Fitzsimmons reported yesterday, INM has published a report by Professor Jay Lorsch of the Harvard business school on the company's corporate governance, available here. It runs to 20 pages and gives INM's board a clean bill of health, concluding that it is "functioning effectively" while "its management and the board is doing what shareholders and other stakeholders expect of it."
It is a firm rebuttal of a report made on behalf of O'Brien last June by Stephen Davis, who runs a US-based consulting company. Lorsch damns its "sloppy and shallow methodology" and scorns it as a one-sided attack from "a self-appointed governance watchdog." Lorsch rejects three key Davis-O'Brien arguments, that INM's board is too big, too ineffective and too much in thrall to O'Reilly.
But that's just one strike against O'Brien, a counter-punch if you like. O'Reilly seems to have helped to deliver a much more threatening right hook to O'Brien's own media interests by complaining about the possibility that his enlarged stake in INM conflicts with cross-media ownership rules because of his substantial radio holdings.
According to an Irish Times story last Saturday, O'Brien is facing a review by Ireland's broadcasting regulator. His company, Communicorp, owns two national commercial stations, two popular Dublin stations and a Limerick station. Now, said the article, in the light of O'Brien's increased INM stake, the Broadcasting Commission of Ireland is to examine whether his cross-media ownership is appropriate.
In fact, a BCI spokesman told me this morning that there is not an official review at present but, instead, there are "ongoing discussions between ourselves and Communicorp".
It is not known whether O'Reilly or INM is directly responsible for alerting the regulator to the cross-media ownership question. But records released to the Irish Times under the Freedom of Information Act show that two INM directors, Gavin O'Reilly and Vincent Crowley, met Ireland's minister for enterprise in December last year when he was deciding whether to approve Communicorp's acquisition of the national station Today FM.
It is also the case that INM has called for changes to the country's competition act in order to prevent any single person or company controlling large parts of the print and broadcast media.
O'Brien is surely steaming about both the Lorsch report and the interest taken in his radio licences by the Irish regulator. So, if he does turn up at the Park Lane hotel on Wednesday, it could prove to be an explosive meeting.
