Ofcom: ‘Very concerned’; Sky shares slide
July 8, 2011
By Nick Snow
Ofcom is likely to investigate News Corporation’s proposed bid for satellite broadcaster BSkyB . Pressure on the regulator has ramped up as more revelations on the News International phone hacking scandal have poured out.
On Friday morning the Prime Minister said Ofcom should take account of ‘the new circumstances’, and Simon Hughes, Deputy Leader of the Liberal Democrats – who was hacked in the early 2000s – has written to Ofcom, with the approval of his leader the Deputy Prime Minister, demanding they investigate.
Ofcom CEO Ed Richards has now written to John Whittingdale MP, chair of the Media Select Committee, saying he believes cannot Ofcom cannot properly conduct the ‘fit and proper’ test on the basis of accusations and that its own probe might compromise police investigations. In other words he believes the test will have to wait until, at least, executives have been charged and possibly until they have been tried.
However he does stress he has asked police to keep Ofcom informed and that it is ‘very concerned’ by the developments at News International.
The problem is the other regulators – Office of Fair Trading and Competition Commission – have no further remit to fulfil and so if Ofcom or the Government doesn’t intervene the deal may go through before any investigation is concluded.
The deal was already guaranteed to be delayed as 156,000 submissions had been received by today’s deadline to the latest consultation – previously seen as a formality. But Ofcom’s attitude may force Secretary of State Jeremy Hunt’s hand to act as it would now be politically unacceptable for some further test of News Corp’s credibility as an owner to wait until after the deal has completed.
BSkyB shares had slid by 7% near the close on Friday as the City consudere for the first time the real possibility the deal could be blocked.