Culture and media secretary Lucy Frazer has reportedly warned the independent directors overseeing the sale of the Telegraph Media Group (TMG) that the recent departure of two senior bosses breached a government order.
Last week, the Department for Culture, Media and Sport (DCMS) informed the law firm acting for the independent directors, Goodwin Procter, that the leadership changes required Frazer’s permission, according to Sky News.
Just over a month ago, the Telegraph announced the appointment of Anna Jones, former chief of Hearst Magazines UK, as the group’s chief executive. She replaced Nick Hugh, who led TMG since 2017.
Finance director Cormac O’Shea left the company a few weeks prior, triggering a government review.
Sources close to Sky said Frazer has decided not to pursue further action over the breaches. But she has warned that further breaches could lead to a fine of up to five per cent of the company’s total worldwide turnover- potentially over £12.5m.
Frazer announced an intervention into the proposed takeover of the broadsheet paper by an Abu Dhabi-backed fund in November last year.
Days later, she issued an order strictly prohibiting any significant changes to TMG’s management. She said this was “to prevent actions by the parties to the merger that might prejudice the process or impede my ability to protect the public interest.”
But a source close to the Telegraph argued the departures of Hugh and O’Shea were part of the “ordinary course of business”, and were therefore excluded from the original order.
DCMS declined to comment.
The Barclay family is trying to buy back their their Telegraph and Spectator using funds from RedBird IMI, a state-backed Abu Dhabi investment vehicle. They lost control of the titles earlier this year when they failed to pay £1.2bn in debt to Lloyds bank.
Ofcom and the Competition and Markets Authority must report to Frazer by next Monday on the findings of their investigations into whether a foreign takeover of the Telegraph titles would damage press freedom in the UK.
The £600m deal has also attracted strong opposition from a range of figures including a former MI6 boss, Telegraph journalists and politicians.
Last year, a group of MPs wrote to deputy prime minister Oliver Dowden, business secretary Kemi Badenoch and Frazer urging them to deploy national security laws and ‘call in’ the transaction using powers under the National Security and Investment Act (NSIA) 2021.