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Fri 28 Jun 2019 01:20 AM

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UK gov't opens probe into Saudi investor's media stakes

UK Culture Secretary Jeremy Wright opens investigation into Sultan Mohamed Abuljadayel's investments in the Evening Standard and Independent

UK gov't opens probe into Saudi investor's media stakes
UK Culture Secretary Jeremy Wright.

UK Culture Secretary Jeremy Wright has opened an investigation into the Evening Standard and Independent after a Saudi investor bought shares in their parent companies.

Wright said that he has issued an intervention notice against Standard publisher Lebedev Holdings and Independent Digital News and Media.

In a statement on the UK goverment website, Wright said his move will see the Competition and Markets Authority watchdog investigate “jurisdictional and competition matters” while broadcast regulator Ofcom will look at the public interest considerations relating to the accurate presentation of news and free expression.

The intervention notice follows the sale by the newspapers’ owner, Evgeny Lebedev, of a 30 percent share in Lebedev Holdings to Saudi investor Sultan Mohamed Abuljadayel for around £25 million earlier this year.

The free London newspaper is edited by former UK chancellor George Osborne.

Abuljadayel also bought a 30 percent stake in Independent Digital News and Media in 2017.

Wright said he considered there were “reasonable grounds to suspect that a relevant merger situation has been created”.

He added: "I invited the parties to submit representations to me, which they have done. I acknowledge the points they have raised about the structure of the transactions and the turnover of the companies. Nonetheless, I still consider that there are reasonable grounds to suspect that a relevant merger situation has been created.

"I have also noted what they have told me about protections for editorial independence... However, I continue to believe that it may be the case that the public interest considerations of freedom of expression and accurate news reporting are relevant to this merger. I thus consider it appropriate for me to intervene in this matter."

Aymen Khoury, dispute resolution partner and Middle East specialist at European law firm, Fieldfisher, said the case has refocused attention on the ambitions of Middle Eastern investors in the UK.

"Pending the outcome of the investigation, any attempt to block stakes in newspapers by private Middle Eastern investors or Gulf state investment vehicles, from Saudi Arabia or elsewhere in the region, could lead to legal challenges, particularly if the UK media is a future target for more Middle Eastern wealth.

"A media-buying spree would be something of a departure from the investment strategy wealthy Arabs and Middle Eastern sovereign wealth funds have pursued in the UK to date.

"Their approach has largely steered clear of anything with a vaguely political slant, including the British press.

"Yet the possibility of more Middle Eastern investors attempting to take stakes in British media companies should not be ruled out – this could be just the start."

Khoury added that depending on how this investigation turns out, it could "curtail attempts by other Middle Eastern investors to move in".