The Culture Secretary, Lisa Nandy, faces a potential High Court challenge from the Free Speech Union (FSU) over her handling of the stalled takeover of The Telegraph by an Abu Dhabi-linked investment fund.
The legal threat comes amid moves by RedBird Capital, a US private equity firm and minority investor in the Abu Dhabi-linked RedBird IMI, to directly acquire The Telegraph.
Gerry Cardinale, founder of RedBird Capital, has indicated that he is prepared to pay more than £500 million, the sum necessary for Abu Dhabi to recoup its initial investment. Mr Cardinale, 57, a major player in international media investment, is currently pursuing an $8bn (£6bn) acquisition of the Hollywood studio Paramount. A transaction involving The Telegraph could be announced within weeks, although any deal would still face months of regulatory scrutiny.
In a letter sent earlier this month, the FSU warned Ms Nandy that it is prepared to launch judicial review proceedings unless she enforces recent laws designed to prevent foreign states from influencing or controlling British newspapers.
Those laws, introduced last year following significant parliamentary pressure, amended the Enterprise Act 2002 through the Digital Markets, Competition and Consumers Act 2024. Specifically, Section 70A of the amended Enterprise Act requires the Secretary of State for Digital, Culture, Media and Sport to issue a Foreign State Intervention Notice (FSIN) to the Competition and Markets Authority (CMA) if there are “reasonable grounds” to suspect that a “foreign state newspaper merger situation” is underway or contemplated. Under this legislation, the statutory threshold for issuing an FSIN is met if a foreign state acquires or attempts to acquire “the right or ability to direct, control or influence to any extent the policy or activities” of a UK newspaper.
These amendments, which came into effect in March 2024, were introduced specifically to strengthen safeguards against foreign state-backed vehicles, such as RedBird IMI, from exerting control or influence over influential British newspapers. Previously, in January 2024, the Government issued a separate measure known as the Public Interest Merger Reference (Telegraph Media Group Limited) (Pre-emptive Action) Order 2024, designed to temporarily prevent operational integration or significant managerial changes at The Telegraph without government approval. However, critics, including Lord Young and the FSU, argue this earlier discretionary measure has proven inadequate, and that the stricter statutory obligations introduced by the March 2024 amendments have clearly been triggered.
The original arrangement prompting these legislative interventions arose in November 2023, when RedBird IMI provided substantial funds to the Telegraph’s then-owners, the Barclay family, enabling them to pay off their debts. Crucially, this financial agreement gave RedBird IMI a ‘call option’ – effectively, the right to convert its substantial loan into outright ownership of The Telegraph. Although RedBird IMI subsequently assured the government that it would swiftly sell this option on to another party following the enactment of stricter laws, no sale has materialised over the past year, leaving the newspaper strategically paralysed at a critical moment for print and digital media.
In its letter, the FSU highlighted documented evidence of interference by RedBird IMI in the operational management of The Telegraph. Responding to the FSU, Ms Nandy argued that RedBird IMI’s actions were insufficient to trigger formal intervention, claiming there had been no “significant changes to the organisational structure or management responsibilities in the business”.
Lord Young subsequently challenged this response during a House of Lords debate last week on the Communications and Digital Committee’s recent report, The Future of News. Describing Ms Nandy’s response as “wholly unsatisfactory”, he argued that her interpretation of the statutory threshold contradicted clear evidence already published by The Telegraph.
Lord Young pointed specifically to a story published by The Telegraph on 17 January, headlined “Telegraph Urged to Slash Jobs and ‘Forget’ Sale as Abu Dhabi Fund Applies Pressure”, which detailed explicit attempts by RedBird IMI to influence the newspaper’s operational decisions. According to the report, the Abu Dhabi-linked fund had urged executives to make significant staff cuts and scale back editorial investments.
Lord Young told peers that Ms Nandy “needs to act before it is too late”, adding: “The committee’s report is entitled The Future of News, and I do not think I am the only member of this House who thinks that that future will be pretty bleak if it does not include The Telegraph.”
A judicial review could prove embarrassing for the Government, which has already faced diplomatic tensions with the UAE due to its handling of the Telegraph saga. Such a review might force the disclosure of a sensitive Ofcom report on the UAE’s approach to press freedom, which was written last year but withheld from publication following assurances by RedBird IMI that it would swiftly secure an onward sale.
The Lords debate was initiated by Baroness Stowell, a Conservative peer who previously played a pivotal role in pressuring Rishi Sunak’s government to block RedBird IMI’s initial takeover attempt. During the debate, peers also criticised Ms Nandy for her lengthy delays in publishing secondary legislation intended to set clear thresholds for permissible minority stakes held by foreign states in UK newspapers. Although a consultation closed nine months ago, Ms Nandy is now understood to favour increasing the permissible foreign stake threshold to between 10% and 15%, following industry lobbying – a decision that could allow Abu Dhabi to retain a passive stake in The Telegraph even under a deal with RedBird Capital.
The dispute raises serious questions about media independence and transparency in the UK. If foreign states, even indirectly, are permitted to influence or control British media organisations, it risks undermining editorial freedom and press plurality – both crucial for holding power accountable in a democracy.
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