Legal advisers have called on the UK government to intervene and safeguard press freedom to prevent a proposed £1.2 billion loan to the Barclay family from leading to an Abu Dhabi takeover of The Telegraph newspaper. In a letter to the consortium led by hedge fund chief Sir Paul Marshall, lawyers from White & Case argued that Culture Secretary Lucy Frazer should issue a Public Interest Intervention Notice (PIIN) and consider a “hold-separate” order to prevent RedBird IMI, an Abu Dhabi-backed investment fund, from converting its loan to the Barclay family into ownership of The Telegraph. They cited concerns over the lack of transparency surrounding the deal.
The auction of The Telegraph, which saw RedBird IMI offering to fund the full repayment of the Barclay family’s debt, has been halted by Lloyds Banking Group. The bank will delay the auction until December 4, during which time it will scrutinize the family’s repayment offer. The parallel auction for The Spectator magazine has also been put on hold.
Wider concern is growing over the potential for an undemocratic foreign state to gain majority control of a prominent news publisher. The UK government has emphasized the importance of press freedom, stating that it is a vital component of democracy. The Commons culture committee has announced plans to investigate foreign state ownership of media and cultural assets, acknowledging the concerns raised by the potential foreign state ownership of a British newspaper title.
Lloyds had seized control of The Telegraph and The Spectator in June after the Barclay family failed to repay their debt. However, if the Barclay family’s repayment offer is approved, Lloyds would be required to end the receivership and return the titles to the family. The proposed deal involves complex loans, including one provided by RedBird IMI, which would convert to ownership of The Telegraph. RedBird IMI is a joint venture between RedBird Capital and International Media Investments, backed by Sheikh Mansour bin Zayed Al Nahyan, the vice-president of the UAE. The majority of the £600 million price would be financed by Abu Dhabi cash.
Amid concerns raised by politicians and the wider public, it is clear that regulatory authorities will need to carefully assess the proposed investment in The Telegraph before granting approval. RedBird IMI has expressed its commitment to maintaining the editorial independence of The Telegraph and The Spectator should the transfer of ownership be approved.
Please find answers to frequently asked questions (FAQ) regarding the potential Abu Dhabi takeover of The Telegraph below:
FAQ
1) What is the concern about the potential Abu Dhabi takeover of The Telegraph?
There are fears that an undemocratic foreign state could gain majority control of an influential news publisher, potentially compromising press freedom.
2) What actions are legal advisers calling for?
Lawyers from White & Case are urging the UK government to issue a Public Interest Intervention Notice (PIIN) and potentially a “hold-separate” order to prevent RedBird IMI, an Abu Dhabi-backed investment fund, from converting its loan to the Barclay family into ownership of The Telegraph.
3) Why has the auction of The Telegraph been halted?
Lloyds Banking Group has suspended the auction to allow for further scrutiny of the Barclay family’s repayment offer, which involves complex loans and potential ownership transfer to RedBird IMI.
4) What is the response from the UK government?
The UK government has emphasized the importance of press freedom and stated that it supports it. The Commons culture committee has also expressed concerns and pledged to examine the issue of foreign state ownership of media and cultural assets.
5) What assurances have been given by RedBird IMI?
RedBird IMI has committed to maintaining the editorial independence of The Telegraph and The Spectator if the transfer of ownership is approved and has stated that it will fully cooperate with regulatory reviews.