The failed takeover of the Telegraph by a UAE-backed consortium would have risked undermining “free expression” in the press, the media watchdog found.
The findings of reports by media regulator Ofcom and competition watchdog, the Competition and Markets Authority (CMA), were published on Friday following a two-and-a-half year wait for their release.
The reports pointed to concerns over the potential ownership of the Telegraph Media Group by RedBird IMI, due to close links with United Arab Emirates.
However, IMI said it “completely rejects” Ofcom’s report, suggesting that Ofcom “failed” to assess IMI as a commercial media company.
Redbird IMI is majority-owned by Abu Dhabi’s International Media Investments (IMI), an investment fund owned by Sheikh Mansour bin Zayed Al Nahyan, vice president of the UAE and owner of Manchester City Football Club.
The publication of the report comes amid a tense diplomatic backdrop between the UK and UAE, after the Manchester City owners were found guilty of breaking Premier League spending rules.
Prime Minister Andy Burnham has since faced scrutiny for his ties to the football club’s owners during his role as the mayor of Greater Manchester, with Abu Dhabi funds helping to back regeneration projects in the city.
Ultimately, RedBird IMI backed out of its proposed takeover of the Telegraph and the Spectator magazine in 2024 after the Government banned foreign states from owning British newspapers and news magazines.
The changes to media ownership rules came after Ofcom and the CMA had written reports to then Culture Secretary Lucy Frazer.
In the now published reports, Ofcom concluded that the takeover deal may “operate against the public interest” in relation to “free expression of opinion in newspapers”.
The report, which has a number of redactions, also raised concerns over how the deal could may not sufficiently meet the “need for accurate presentation of news in newspapers”.
An IMI spokesman said: “International Media Investments (IMI) completely rejects Ofcom’s report: its methodology, its reasoning, and its conclusions, which were reached before the evidence was examined.
“Instead of judging the RedBird IMI bid for The Telegraph on the facts, Ofcom based its assessment on an arbitrary and biased set of assumptions, conflating the commercial interests of a private company with the conduct of a sovereign state.
“It is not the role of a British media regulator to adjudicate the laws and governance of foreign nations.
“Ofcom gave no weight to IMI’s legally binding, permanent undertakings – including a total guarantee never to influence editorial decisions at The Telegraph, alongside an independent Editorial Trust with absolute veto power over the appointment and removal of the editor-in-chief.
“Regulatory decisions in British media have historically been decided on conduct, binding commitments, and commercial incentives.
“The RedBird IMI bid was not judged on the facts or on IMI’s track record. It was judged on its origin and not its conduct.”
An Ofcom spokesman said: “The purpose of a Phase 1 assessment is to look at whether a potential deal raises public interest concerns that warrant referral to the Competition and Markets Authority, which would then submit advice to Government for a final decision.
“In this case, the assessments we carried out were comprehensive, evidence-based and objective. We found that IMI, an investment vehicle owned by Sheikh Mansour, should be considered an extension of the UAE state.
“Following detailed analysis, we found there was a case for further examination.”
German media giant Axel Springer bought the Telegraph for £575 million earlier this year after it was put back up for auction following a lengthy process to find a new owner.