September 27, 2022

Hidden buyer of UK’s Evening Standard stake revealed as Saudi investor [used a Cayman Islands company]

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By Matthew Graham and Cynthia O’Murchu From Financial Times

The Evening Standard is edited by former chancellor George Osborne © Charlie Bibby/FT

The mystery buyer of a large stake in the Evening Standard’s parent group who used a Cayman Islands company to mask his identity is Sultan Mohamed Abuljadayel, a Saudi investor, according to two people with knowledge of the deal.

The free London newspaper, which is edited by former UK chancellor George Osborne, is majority owned by Lebedev Holdings, the corporate vehicle of Evgeny Lebedev. In total, Mr Abuljadayel has bought a stake of 30 per cent for about £25m, according to two people — about a third more than initially disclosed in company filings in December, with the final tranche agreed last week.

Little is known of Mr Abuljadayel, who two years ago bought a similar sized stake in the Independent, a digital-only title that was acquired by Mr Lebedev’s father, Alexander, a former KGB officer, in 2010.

Mr Abuljadayel is associated with NCB Capital, the investment banking arm of Saudi Arabia’s National Commercial Bank. The lender is majority owned by the Saudi government through its Public Investment Fund.

His purchase of the Independent stake in 2017 raised the prospect of Saudi Arabia using media investments for soft power purposes. However, a spokesman for the title said at the time that its editorial freedom would be protected.

“We would ask anyone to look at the Independent’s coverage since 2017. It has been robust and holds the Saudi regime to account,” said one person briefed on the deal.

Person briefed on original Independent deal The Evening Standard and Mr Lebedev declined to comment on the latest deal.

Mr Abuljadayel did not respond to requests for comment.

The use of a Cayman entity to acquire the stake in the Standard’s owner stake attracted some criticism. Paul Farrelly, an MP who serves on parliament’s digital, culture, media and sports committee, told the Financial Times last month that the Standard’s influential position in London meant it was important “to have honesty about its ownership”.

It is unclear why Mr Abuljadayel used the Cayman entity to make the investment. The deal was completed four months after the murder of the Washington Post journalist Jamal Khashoggi — a killing that was allegedly carried out by Saudi agents. International anger at the killing has not dissipated. Several high-profile deals between the kingdom and western groups have been reviewed or scrapped in the wake of the murder.

The purchase of the stake in Lebedev Holdings is the latest push into western media by a Saudi investor. In 2015, NCB Capital acquired a controlling stake in the Saudi Research and Marketing Group, a publisher with links to King Salman’s family. Since then, SRMG has announced a series of partnerships with big media organisations in the west.

SRMG said last September that it would launch an Arabic-language business and financial news service with Bloomberg in a deal worth an estimated $90m over 10 years. The company also announced a licensing agreement with the Independent for news websites in Arabic, Urdu, Farsi and Turkish. Independent Arabia was launched at the end of January.

The latest investment provides important funding for the Standard. The Lebedevs bought the Standard and the Independent in 2009 and 2010 respectively for £1 apiece and have since invested millions in the titles.

The Standard eventually turned a profit but recorded a £10m loss in the financial year ended in September 2017. It is hoped that the new funds will help it return to the black, people briefed on the transaction said.

Copyright The Financial Times Limited 2019. All rights reserved.

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