By Muvija M
LONDON (Reuters) -An Abu Dhabi-backed group has tweaked its takeover plan for Britain's Telegraph newspaper, prompting another round of government scrutiny and a scolding from a minister over the last-minute changes.
Growing alarm over possible foreign meddling in editorial matters at the politically influential, right-leaning title led media minister Lucy Frazer to step in last year and order a regulatory probe on public interest grounds into the deal proposed by RedBird IMI (LON:IMI).
The titles, technically still owned by the Barclay family after RedBird IMI helped pay back its 1.2 billion pound debt to Lloyds (LON:LLOY) Bank to end a long-running dispute, are still regarded as important indicators of views in the governing Conservatives.
RedBird IMI was then due to gain control of the assets, which also includes the Telegraph's sister title, the Spectator magazine, through a debt-for-equity swap, but that was halted by the government on public interest grounds.
The 168-year old newspaper has been a forum for British politicians to express their opinions at critical turns in the country's history, from Winston Churchill's views on foreign affairs in the lead up to World War Two to Boris Johnson's criticism of the European Union ahead of the Brexit referendum.
The Telegraph itself has recently reported that a cabinet minister and dozens of lawmakers have opposed the takeover bid by Redbird IMI. A group of lawmakers had also cautioned the government against that deal, saying "the UAE's increasingly influential position as a mediator and power-broker" posed a risk of interference in Britain's national conversation.
The competition watchdog, the CMA, and media regulator Ofcom had been due to report back their findings on the deal's impact on accuracy and freedom of expression by the end of Friday, after which Frazer would have determined the next step.
She could have decided to block the deal or allow it to go through, likely with some concessions, or order a lengthier probe.
REDBIRD IMI'S MOVE 'NOT CONDUCIVE'
On Tuesday, however, RedBird IMI changed the corporate structure through which it intends to take control of the titles, according to government disclosures on Wednesday.
"This change was made in order to clarify the point that IMI is a passive investor in the company that will own the Telegraph and as such will have no management or editorial involvement whatsoever in the title," a company spokesperson said.
The titles will now be owned by a new English registered company of which RedBird IMI - backed by Emirati royal and Manchester City owner Sheikh Mansour bin Zayed Al Nahyan - is a limited partner.
But Frazer said she continued to have concerns on public interest grounds and intended to begin a fresh probe into the deal, giving the Barclays (LON:BARC) and RedBird IMI until 0900 GMT Thursday to make their cases regarding the new notice.
"I have noted the very late stage in the process at which information about this new corporate structure has been shared and implemented," Frazer said in a written statement to parliament.
"I do not consider this is conducive to the full and proper functioning of the process."