BUSINESS INTERVIEW:After being ousted from the board of INM last year, Denis O'Brien's long-time business associate is in no doubt about the changes needed at the top of the O'Reilly media empire
IT IS SAID THAT revenge is a dish best served cold. Cork businessman Leslie Buckley and his long-time business associate Denis O’Brien might be able to put that to the test on June 8th when Independent News & Media holds its annual shareholder meeting.
The word is that O’Brien, INM’s biggest shareholder, will look to remove Gavin O’Reilly from his post as chief executive, possibly with the support of fellow multimillionaire and INM shareholder Dermot Desmond.
Just a year ago, Buckley was himself ousted from the board of INM in a shareholder vote at the AGM. He had been one of three O’Brien representatives on the INM board since 2009.
Buckley says O’Reilly and his family were behind his being axed.
He won’t admit to it but you sense that the one-time top corporate troubleshooter has been biding his time for retaliation.
Buckley describes as “appalling” the negative coverage of O’Brien in the Sunday Independent of April 1st, when multiple negative stories about the mobile phone entrepreneur were published by the paper.
“It’s very clearly part of a campaign against Denis O’Brien, right,” Buckley says in a hushed Cork drawl.
“It could, of course, have something to do with the AGM, but there is very clearly a campaign . . . against Denis O’Brien.”
It was reported after last year’s AGM that Buckley had circulated a leaflet after losing his seat on the board, accusing Gavin O’Reilly of orchestrating his ousting and then chairman Brian Hillery of canvassing shareholders to vote him off the board while publicly supporting him.
For the record, O’Reilly and INM have denied playing any part in Buckley’s removal from the board. Investment advisory groups ISS and Glass Lewis produced reports in advance of last year’s AGM questioning his independence, given his close links with O’Brien.
They also suggested that he lacked relevant experience of the industry and recommended to investors that they vote against his re-election.
Buckley has “absolutely no doubt” that the O’Reillys were behind the move against him.
“The final vote was his father’s [Sir Anthony O’Reilly].”
Buckley made history of the unwanted kind, becoming the first board member of a mainstream Irish plc to be voted off by shareholders.
How did that feel?
“I was obviously very annoyed at the time because I felt that in my period on the board, we had at least made some progress.”
INM has had another difficult year since that stormy AGM. Its share price has continued its downward spiral and profits in 2011 fell by 8.6 per cent.
You can almost sense O’Brien taking aim with Buckley loading his gun. As a former board member and a “small shareholder” in INM, does Buckley think that Gavin O’Reilly should be replaced as CEO?
“If you look at the performance of the company, I think the share price is down about 65 per cent since the last AGM. Any shareholders of any business where the share price is going south to such an extent would have to ask questions about the performance of the leader of the company and the senior management,” he says, a tad evasively.
Should he go?
“I aired that view [that he should go] last year. They were my views last year as a board member. I didn’t see him bringing the company in the direction that I thought it should be.
“It was very clear to me that print was on the decline and we needed to be bringing this business into the digital sector. I haven’t seen anything that would change my view and I haven’t seen anything that’s changed in the direction of INM today. So I haven’t changed my view.”
Is that’s a yes, then?
“Yes, indeed, absolutely.”
Do you think you’ll ever serve on the board of INM again?
“I haven’t really given it any thought, but I never say never.”
He gives no view on whether O’Brien might move to acquire the entire company. “It may sound strange but I’ve no idea. I very rarely discuss INM with Denis.
“I’m fairly busy. It’s not as if I’m sitting around twiddling my thumbs wondering what Denis is going to do with INM.”
You could argue that INM has been a
victim of the recession and the global
financial collapse, in parallel with a seismic shift in emphasis for traditional print media towards digital. What would the O’Brien camp do differently to turn around the performance?
“Number one, they probably need to have, as in Aer Lingus, a Greenfield [restructuring] plan for the business,” says Buckley, who also happens to be a non-executive director of the airline.
“That business [INM] is not even generating enough cash to pay its debts. That’s one area. There needs to be an amount of costs taken out of the business.”
He’s a bit vague about precisely what costs, arguing that, as he’s no longer on the board, he would have to “get a look under the bonnet” before giving an full assessment. But he questions why the company continues to have an office in London.
“Why would you have an office in London when you have businesses in Ireland and in South Africa? This isn’t a huge business.”
Another is a more concerted move into digital media.
“They should be really promoting the whole online business and they’re not really doing that, either here, in South Africa or elsewhere.”
What changes would he make to the editorial structure?
“I wouldn’t comment at this stage. But half the country must have been bored stiff reading the Sunday Indo last week [April 1st],” he says.
The negative coverage in the Sunday Independent centres around the ongoing controversy over O’Brien’s links to the current Government in light of the negative findings against him by the Moriarty tribunal last year.
Moriarty concluded that former communications minister Michael Lowry, then a Fine Gael minister, had “secured” the second mobile licence for O’Brien and Esat.
O’Brien’s appearance alongside Taoiseach Enda Kenny at the Ireland Day event in the New York Stock Exchange around St Patrick’s Day has garnered many column inches in the top-selling Sunday broadsheet.
Buckley is fuming about the coverage against his pal, describing it as “totally unprecedented in the history of newsprint in this country”.
“Every page you turned there was something else about Denis O’Brien,” he adds.
The Moriarty findings against O’Brien have stoked up a media frenzy about his contacts with the Government, Fine Gael in particular.
“I know that Denis O’Brien went to the function in New York at huge personal inconvenience to himself,” Buckley says. “Denis is passionate about many things but he’s absolutely passionate about this country and its future success.
“Denis will sell the positive aspects of this country better than anybody I know and I think it’s appalling that, because he happens to be there with the Taoiseach, that there’s this ridiculous hoo-ha about it.
“Denis gives employment to about 2,000 people in this country and that’s never spoken about, irrespective of the employment he gives worldwide.”
This is true, but it’s also the case that he’s a tax exile.
“That’s a decision for Denis O’Brien. He doesn’t spend a lot of time in Ireland because a lot of his business is outside Ireland. And Denis has put a lot of money into Ireland in many ways.”
Like O’Brien, Buckley does not give much weight to the findings of Moriarty.
“Denis has always questioned the whole process of the tribunal. He’s right to have done so. It was shown very clearly that Esat Telecom was the right company to win that licence. What Denis has done in the Caribbean and other countries is shown that he was again the right person to be given the licence.”
Buckley’s business and charity interests are many and varied. He’s executive chairman of Irish online recruiter Saongroup, which announced a €25 million expansion of its business in China as part of the recent trade mission led by the Taoiseach.
Saongroup is majority owned by Denis O’Brien and rumours circled that O’Brien had been asked by those close to the Taoiseach to stay away from the China announcement in light of the controversy relating to New York.
“Nothing could be further from the truth,” Buckley says. “I’ve heard that over the past few days. Denis is on the board of Saongroup China. He travels out there from time to time with me, but he wasn’t due to go with me on that trip.”
Buckley is also unconcerned about growing fears among commentators that China is coming off the boil and could implode.
“I find that incredible because the forecast for economic growth in China this year is 9 to 10 per cent. Jesus, if we had anything like that here we’d be clapping our hands.”
Saongroup’s web traffic in China grew by 37 per cent last year. “All I can say is that it will be higher this year,” Buckley says. Its presence in China will double to 100 cities by year end.
Buckley is also encouraged by the latest statistics from a survey by Irishjobs.ie, its local entity. "From quarter four last year to quarter one this year, there was a 4 per cent increase in jobs," he says. "Where? Banking and finance, education and engineering. I don't think we're thinking positively enough in Ireland."
He could be right, but the survey also found that year on year the number was down.
Overall, he thinks the Government is performing well. “The Taoiseach and the senior Cabinet people are out there selling Ireland to the world and doing a good job.”
Buckley is also busy banging the drum for Haven, his charity in Haiti that has built about 2,500 housing units since its launch three years ago.
After the 2010 earthquake, he set a target of building 10,000 new homes for the citizens of the impoverished state by 2014 – at a cost of $30 million.
“We’re struggling to do that but I’m not moving off that target as yet,” he says. “It’s really dependent on donor funding. Because the eyes of the world are somewhat off Haiti, people have kind of forgotten about it.”
Irish rugby star Paul O’Connell was recently signed up to help push its fundraising activities. “We might just miss a year with the 10,000. But if it’s not 2014, it will be 2015.”
Buckley is also heavily involved in Digicel, the mobile operator based in the Caribbean, Central America and the Pacific Islands that he helped O’Brien to set up. At the end of March, the company acquired wireless rival Voilà in Haiti for $97 million.
“It now puts us in a very strong number one position there,” Buckley explains.
Digicel has pretty much saturated the Caribbean with the obvious exception of Cuba, which remains a closed shop.
“It would be a great market. We keep our eyes on it, but I’d say it’ll be another four or five years away. I might even be retired by then.”
Closer to home, Digicel did look at Eircom before deciding it wasn’t worth the hassle.
“What turned us off? A lot of work to be done with the business, huge debt, and to turn that around, and to be developing what we have, would have needed a lot of bandwidth, and so we decided not to progress with it.”
His interests also include being a Government representative on the board of Aer Lingus. With the State planning to sell its 25 per cent stake, what does Buckley think should happen to the shares?
“Some type of strategic alliance will be required. But it’s important that, into the future, it retains as much independence as possible.”
Abu Dhabi-based carrier Etihad has expressed an interest in the Government’s stake. Would he support this?
“Etihad has been mooted on a number of occasions, but there are other parties who I’ve no doubt at the appropriate time will be interested.”
Who?
“I’m not in a position to divulge that,” he says.
What about the Willie Walsh-led International Airline Group?
“I’d say they’re sitting on the fence looking at it. They’d probably be very interested in the slots at Heathrow.”
Buckley is also heavily involved in trying to bring the €400 million Cork Science Innovation Park to life.
“We’re now finalising a business plan and we will be presenting this to Government sometime in the summer,” he says.
“We have to look to the future generations in every way. I see this as a very innovative way of doing that.”
At 67 and with a personal wealth estimated at €40-€50 million, many businessmen might be winding down their careers.
Not Buckley. The Corkman continues to rack up the air miles from his various activities and shows no interest in slowing down. “I’m still not thinking of retirement. I’m lucky. I enjoy everything I’m doing. Why would I retire?”
FRIDAY INTERVIEW:
Name:Leslie Buckley
Age:67 (He says he hasn't applied for his free travel pass)
Family:Married to Carmel with three children
Home:Dalkey, Co Dublin
Hobbies:"I'm still playing lousy golf. I like hillwalking."
Something we might expect:"I'm a Munster rugby fan."
Something that might surprise:"I swim all year round."
