Culture Secretary Lucy Frazer steps in amid ‘concerns’ over the proposed sale of The Telegraph and Spectator to Abu Dhabi
The Culture Secretary last night dramatically intervened in the United Arab Emirates-funded bid to buy the Daily Telegraph.
Lucy Frazer ordered the media watchdog to investigate whether the controversial deal risked ‘the need for accurate presentation of news and free expression of opinion in newspapers’.
She issued the Public Interest Intervention Notice (PIIN) after concluding that concerns raised by the proposed takeover of the long-established newspaper by the RedBird IMI consortium led by the vice- president of the Gulf state ‘warrant further investigation’.
Her move will lead to Ofcom reporting to her on ‘the media public interest consideration’ while separately the Competition and Markets Authority will look into ‘jurisdictional and competition matters’ relating to the newspaper industry.
Both must report back by January 26 next year but if these preliminary reports identify serious issues then further investigations, taking an expected six months, could be launched.
Lucy Frazer has intervened in the proposed takeover of The Telegraph by ordering the media watchdog to investigate it. Pictured: The Culture Secretary at Downing Street on November 14
The Telegraph is the target of a takeover bid by RedBird IMI, a joint venture which involves the investment firm IMI controlled by Abu Dhabi-based Sheikh Mansour (pictured)
‘My department has today written to the Barclay family and RedBird IMI, the current and proposed owners of Telegraph Media Group, to inform them that I will be issuing a Public Interest Intervention Notice in relation to the anticipated acquisition of the Telegraph Media Group Ltd by RedBird IMI,’ Ms Frazer said in a statement.
‘This relates to concerns I have that there may be public interest considerations… that are relevant to the anticipated acquisition of TMG by RedBird IMI and that these concerns warrant further investigation.’
However, her order does not scupper completely the bid by RedBird IMI, a joint venture run by former CNN boss Jeff Zucker which is comprised of US private equity firm RedBird Capital and the investment firm IMI controlled by Abu Dhabi-based Sheikh Mansour. Despite the regulatory probes, the group is still expected within days to repay the debts run up by the Telegraph’s long-standing owners, the Barclay family, to Lloyds Bank.
READ MORE HERE: Tory MPs demand national security probe into the sale of the Telegraph to Abu Dhabi-based investment fund
RedBird IMI has already reached a deal with the Barclays to give £1billion to Lloyds, which seized control of the paper in June, and so avoid the bank putting the paper and the Spectator magazine up for auction.
Sheikh Mansour is taking a risk in making the payment months before knowing if he will be able to take control of the Telegraph but a source told the BBC last night it is a ‘risk he’s willing to take’.
It would leave the paper in limbo while the watchdogs investigate, with the existing directors appointed by Lloyds remaining in place and the new owners not exercising control.
If the Government eventually allows the deal to go ahead, RedBird IMI will then be able to convert its debt funding into ownership of the media company.
A spokesman for the bid said: ‘RedBird IMI has today received confirmation… that a Public Interest Intervention Notice has been issued regarding a potential change of ownership of the Telegraph Media Group.
‘We welcome the opportunity to provide the Government with the information needed to scrutinise our deal, and we will continue to co-operate fully with the Government and regulator throughout this process.
‘RedBird IMI remains entirely committed to maintaining the existing editorial team of the Telegraph and Spectator publications and believes that editorial independence for these titles is essential to protecting their reputation and credibility.’
Despite the assurances, however, the proposed takeover has alarmed many senior political figures. This week former foreign secretary Lord Hague described the deal as ‘disturbing’ and said allowing a foreign state to effectively own a British newspaper was ‘going too far’.
The proposed takeover of The Telegraph has alarmed many senior political figures despite assurances from those behind the bid that its editorial independence will be maintained
Then 18 Conservative MPs warned ministers that the deal ‘represents a very real potential national security threat’.
New Foreign Secretary Lord Cameron highlighted the vital importance of a free Press at an awards ceremony run by the Spectator magazine on Wednesday night. He told the event: ‘I’m delighted to be Foreign Secretary, supporting a Prime Minister who is doing a great job leading our country in such difficult times when freedom, the rule of law and democracy are under such jeopardy across the world.
‘At moments like this our free Press is more important than ever. So thank you for what you do to uphold free speech, to scrutinise power, to fight misinformation.’ However others in government are less concerned, with Investment Minister Lord Johnson claiming opposition is ‘sentimental’ and insisting the UAE is a ‘first-class and extremely well-run country’.
It was also claimed that the Foreign Office had stepped in to ‘soften’ the language used by the Culture Secretary when she wrote to RedBird IMI to avoid offending Abu Dhabi ahead of a summit for foreign investors at Hampton Court Palace.
Last night former Cabinet minister Sir Iain Duncan Smith told the Mail: ‘It’s the right thing to do, so well done to her. However, it’s not good enough to look at it solely from a commercial standpoint. Because of the nature of where the money is coming from, there needs to be a proper security review done by the security services.’
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