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Government missed deadline to probe Saudi investments in Standard and Independent, judge says

The Government missed the deadline to force a full investigation into Saudi investments in the Evening Standard and Independent newsbrands, a tribunal has ruled.

ESI Media, which represents both newspapers, said it was “delighted” by the Competition Appeal Tribunal’s decision, calling the proposed investigation “disproportionate” and “unfair”.

Then-Culture Secretary Jeremy Wright issued an intervention notice against Standard parent company Lebedev Holdings and Independent Digital News and Media in June after an investor with “strong links” to the Saudi state bought shares in both companies.

Proprietor Evgeny Lebedev (pictured) sold a 30 per cent stake in Lebedev Holdings to Cayman Islands company International Media Company for around £25m between December 2018 and February this year.

IMC has two issued shares, one owned by Saudi investor Sultan Mohamed Abuljadayel and one by Wondrous Investment Holdings, a limited partnership in which the Saudi-based National Commercial Bank has voting rights.

Lebedev also sold Abuljadayel and Wondrous a 30 per cent stake in the Independent two years ago via another Cayman Islands company, Scalable.

Wright asked the Competition and Markets Authority to investigate “jurisdictional and competition matters” and broadcast regulator Ofcom to look at the public interest considerations relating to the accurate presentation of news and free expression.

ESI Media fought the investigation by applying for a judicial review of the decision, claiming the Department for Digital, Culture, Media and Sport had “failed to follow the correct procedures” and made an “unlawful intervention”.

Following a court hearing on 23 July, judge Mr Justice Roth has now backed the publisher, saying that although the intervention notice was issued in time, a four-month time limit for the Culture Secretary to order a full investigation expired on 1 July.

Wright, who has now been replaced as Culture Secretary by Nicky Morgan under Prime Minister Boris Johnson, had claimed the Enterprise Act 2002, under which he issued an intervention notice, imposed no time limit on referral to a full investigation in a public interest case.

But the judge dismissed this and deemed the relevant period to have begun on 1 March because this was when the CMA was first made aware of the material facts in the case by the DCMS.

A DCMS spokesperson said: “We are disappointed with this outcome and will study the judgment carefully before deciding our next steps.”

The Government has until 6 September to decide whether to appeal the findings.

The CMA produced a report into the Saudi deals for the Culture Secretary one day after it was ordered to do so in June. It found the investments  would not result in a “substantial lessening of competition”.

Ofcom is still required to produce its own report by Friday.

An ESI Media spokesperson said: “We have been clear that the Secretary of State’s decision to issue his intervention notice relating to minority investments in Lebedev Holdings Limited and Independent Digital News and Media Limited was disproportionate to the facts, unfair and a waste of public money.

“The tribunal agreed with us that the deadline to make a ‘phase two’ reference to the CMA expired on 1 July and we are pleased to have resolved this issue.

“There are no public interest concerns arising from these investments as editorial independence and freedom of expression have always been, and continue to be, critical to our publications.”

Read the full judgment here.

 Picture: Reuters/Neil Hall

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