Frazer to prohibit removal of key Telegraph staff during probe

Business

The government is to prohibit the removal or transfer of key Daily Telegraph journalists during a public interest probe into the newspaper’s prospective takeover by a state-backed Abu Dhabi investor.

Sky News has learnt that Lucy Frazer, the culture secretary, is preparing to make an interim enforcement order (IEO) that will impose a set of restrictions on the Daily and Sunday Telegraph’s current owners.

City sources said the IEO – which has been notified to the Barclay family – was likely to be made public later on Friday.

Both the family and RedBird IMI are said to have agreed to the restrictions.

It will come within hours of the government issuing a Public Interest Intervention Notice (PIIN) that will subject the change of control at the broadsheet titles to a probe by Ofcom and the Competition and Markets Authority.

The IEO will prevent the Barclay family or RedBird IMI from expediting a further change of ownership, removing directors or transferring top editorial staff without the secretary of state’s approval, according to one insider.

Culture Secretary Lucy Frazer leaving Number 10 Downing Street, London, after a Cabinet meeting. Picture date: Tuesday June 20, 2023.
Image:
Culture Secretary Lucy Frazer

Whitehall officials had been considering using a separate order to ensure the newspapers’ independence during the PIIN, but sources said the IEO would effectively achieve the same objectives.

News of the IEO may assuage concerns raised by a growing number of Conservative parliamentarians about the Barclay family, which has owned the Telegraph since 2004, or RedBird IMI attempting to exert renewed influence on the newspapers.

Ms Frazer is seeking the regulators’ responses before the end of January, after which the takeover of the broadsheet newspapers could be approved or blocked.

Dozens of Conservative MPs, including the former party leader Sir Iain Duncan Smith, have called for the deal to face further investigation under national security laws.

The repayment of a £1.16bn debt to Lloyds is, however, unaffected by the PIIN.

Earlier on Friday, Sky News revealed that shareholders in Lloyds Banking Group could reap a windfall worth more than £500m early next year following the deal to repay the loans.

Lloyds is expected to receive the funds early next week from the Barclays following an agreement between the family and RedBird IMI, an Abu Dhabi-based vehicle which is majority-funded by members of the Gulf state’s royal family.

RedBird IMI plans to convert a £600m chunk of the loan into shares in the Telegraph newspapers and The Spectator magazine if it gains regulatory approval for the deal.

RedBird IMI, which is fronted by the former CNN president Jeff Zucker and funded in large part by Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City, has pledged to preserve the Telegraph’s editorial independence.

A trio of independent directors, led by the Openreach chairman Mike McTighe, will remain in place while the public interest inquiry is carried out.

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RedBird IMI’s move to fund the loan redemption has circumvented an auction of the Telegraph titles which has drawn interest from a range of bidders.

Prospective bidders led by the hedge fund billionaire and GB News shareholder Sir Paul Marshall had been agitating for the launch of a PIIN.

The Telegraph auction, which has also drawn interest from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, is now effectively over.

Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph in 2004.

Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.

The DCMS and a spokesman for the Barclay family declined to comment.

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