Independent News & Media, the Irish parent of Australia's APN News & Media, says a director has filed a lawsuit claiming payments to departing chief executive Gavin O'Reilly are unlawful.
The Irish company said legal proceedings have been initiated in the High Court of Ireland by director Paul Connolly, who claims the payment to O'Reilly, which was approved by the board on April19, "required the prior approval of shareholders and was consequently unlawful."
O'Reilly is also stepping down as chairman of APN, publisher of the New Zealand Herald. INM said it had received legal advice that the payment, made under what it called "the Compromise Agreement" didn't need shareholder approval.
"The company will vigorously defend these proceedings," it said.
O'Reilly quit as CEO of INM, Ireland's biggest newspaper company, after reaching a compromise agreement with the board amid pressure from dissident shareholder Denis O'Brien, who owns a 22 per cent stake.