The UK Government could open an investigation into the Evening Standard and The Independent after an investor with “strong links” to the Saudi State bought a share in their parent companies.
Evgeny Lebedev, owner of the Standard and Independent, sold a 30 per cent stake in Standard publisher Lebedev Holdings to Saudi investor Sultan Mohamed Abuljadayel for around £25m earlier this year.
Two years earlier Abuljadayel had bought a 30 per cent stake in Independent Digital News and Media, which publishes The Independent.
Culture Secretary Jeremy Wright told Parliament today that he had written to Lebedev Holdings about the holdings sale and said he was “minded to” instruct regulators to launch an inquiry over public interest concerns.
In a letter to Lebedev Holdings today, the Department for Digital, Culture, Media and Sport said the shares in the Standard were bought through the Cayman Island-registered International Media Company, while shares in the Independent were purchased by Scalable Inc.
He said the companies had shareholders with “strong links to the Saudi Arabian state”.
In a written statement to Parliament earlier, Wright said he had was “minded to” issue an intervention notice against Lebedev Holdings’ in relation to the deal.
He went on to say that, if the notice were to be issued, he would approach Ofcom and the UK competition watchdog to report on public interest and competition concerns, which could lead to full investigation by the Competition and Markets Authority.
Wright said “the need for (a) accurate presentation of news; and (b) free expression of opinion” were relevant public interest grounds for an investigation into the holdings sale.
The Independent’s editor has previously said he had been given “cast-iron, unequivocal reassurances” that the Saudi shareholder would not interfere in its coverage of Middle East issues.
The Standard has said a formal agreement had been undertaken to protect its editorial independence.
Speaking at this year’s Hugh Cudlipp Lecture, Evening Standard editor George Osborne said he had not met Saudi investor and told the audience that the newspaper’s independence was unaffected by the purchase.
The DCMS letter said: “The Secretary of State has carefully noted Lebedev Holdings’ representations that the shareholders in International Media Company and their appointed directors will have no control over the appointment of the editor or editorial matters at The Evening Standard (and that the editor of The Evening Standard will report to the Managing Director).
“However, he has also noted the structure of ownership, the lack of clarity around beneficial ownership of IMC, Scalable and Wondrous Investments, and the links between the various shareholders, all of which may have an effect on the Evening Standard and the Independent’s news agendas.
“He therefore considers that the accurate presentation of the news and freedom of expression public interest ground may be relevant to the merger.”
Lebedev Holdings has until Monday to send in written representations to the Government. It did not wish to comment for this article.
Wright said he would make a final decision on the matter no later than the week commencing 24 June.
Picture: Press Gazette