The transcripts of the official inquiry into the culture, practices and ethics of the press. More…


  • Please make yourself comfortable. I was going to ask you to move the previous folder, but you have.

  • Can you please state your full name to the Inquiry?

  • You've provided a witness statement in response to a section 21 notice. Can you confirm that the contents of that statement are true to the best of your knowledge and belief?

  • You should find your witness statement behind tab 1 in this bundle. If you look at paragraphs 10 and 11 of the statement, you will find your career history. I will just check with you that it's correct. You are the managing director of IPL, Independent Print Limited?

  • You were appointed to that role following the purchase of the Independent and the Independent on Sunday by IPL, a company controlled by the Lebedev family, on 30 April 2010. Prior to taking that role, you were the managing director of the Evening Standard from 2007 to 2009, and prior to that you worked for News International as general manager of Times newspapers and marketing director of Times newspapers.

    At the present time, you are also the managing director of Evening Standard Limited, which is also owned by the Lebedev family, although you say the companies' operations are legally, editorially and financially independent from each other. Have I correctly summarised the situation?

  • Correct, apart from 24.9 per cent is also owned by DMGT of Evening Standard Limited.

  • Before we just touch on the corporate structure at the Independent and your role within that corporate structure, I'd like to touch upon something that you say at paragraph 9 of your statement. Just turn back to where we were just reading from.

  • You draw a distinction between serious news and celebrity kiss-and-tells, and that distinction that you make there at paragraph 9 is stressed a lot in the evidence that you give. I have this question for you: should ethical standards or codes of conduct differ depending on the content of the newspaper in your view?

  • Also, does the fact that you may not seek this type of story, celebrity kiss-and-tells and so on, mean that it is altogether easier to be ethical?

  • I think that's probably a better question for the editor.

  • We'll move on to corporate governance.

  • But your view about the approach to editing or what should be in newspapers or shouldn't be in newspapers professionally appropriately hasn't differed whether you've been at the Times or the Mail or whenever?

  • I've never been involved in the editorial sign-off process of stories, but I think people believe that it's exactly the same in each newspaper group but some newspaper groups have a harder challenge because they have more stories of a certain type, so the pressure on the business may be greater, so they probably are going to get it wrong slightly more times than people that don't have such challenging stories.

  • They have different challenges, because you may do a story that's nothing to do with celebrities but equally involves the same sort of questions you might ask if you were looking at a celebrity, but on a serious subject, a different subject.

  • Can I take you to paragraph 12 onwards of this statement to go through the system of corporate governance at IPL. You explain that you have a board structure in place which consists of a chairman and various other directors. The board is supported by Mr Malhotra, who we'll hear from shortly, and he also attends board meetings and takes minutes and so on.

    You then explain that board governance covers a number of elements but is primarily about the financial management of the business of producing and printing the newspaper. But as you've already mentioned, the philosophy of the titles is that editorial staff are not subject to proprietorial control or influence. You say this:

    "As such, whilst there is an editorial and legal clearance procedure, it is generally kept separate from the financial and commercial side of the business."

    So two questions, please. First of all, what do you mean by the word "generally"? In what situations would the editorial and legal procedure not be kept separate from the financial and commercial side of the business?

  • Newspaper businesses tend to work on annual plans and budgets pre-agreed on an annual basis, and we separate commercial and editorial to create clear editorial independence. If the editorial team is delivering their costs to the pre-arranged budgets and the sales of the newspaper are going in line with expectation, there would be no reason to challenge editorial processes or procedures at all from a commercial side. However, if something did go wrong and the sales were affected dramatically or there was a huge change in the cost of the editorial structure, it could come up to a board level and it would be debated and discussed and the editor would talk through the issues, why they had occurred, and we'd work out whether the board needed to be involved in any shape or form.

  • Okay. The second question: why is editorial independence considered so important at the Independent or the IPL titles?

  • I think it is every newspaper. It's the traditional way. The editorial teams are very, very separated from the commercial teams. It's built up over history. We believe it's the right way, and there's a sort of phrase that goes on: if it ain't broke, don't fix it. At the Independent, we have few PCC complaints, we have very small costs in terms of legal fees, we deal with things very quickly and we don't think there is an issue that would suggest we should change that historical process.

    Obviously we've been looking at things considerably in the last year in the light of what's been going on, but history suggests that it's been working for us.

  • You go on to say at paragraph 14 that board governance can be summarised in a specific way: there's a company strategy and you're responsible for that.

  • That's then approved and endorsed by the board. You have annual financial planning and budgeting, you have monthly board meetings and so on, and you explain at the end of the paragraph that in terms of editorial staff, they have budgets that they have to meet, and you look at reports relating to that on a weekly basis.

  • Weekly and -- mainly on a monthly basis. It's reported on a weekly but we get into the detail on a monthly basis, yes.

  • All right. Then you're asked: does this system of corporate governance work in practice? You're answer appears to be: absolutely, it's all incredibly rigorous. You then refer back to the fact that something will only be referred up to the board if something happens that affects IPL's finances or a serious reputational issue, and then you would expect the board to become involved?

  • Is that correct? Thank you. You explain at 17 that there are documents with cover some of the relevant issues. For example, employment contracts, contributory agreements, terms for freelancers, the PCC code, the staff handbook, and you've just introduced a formal code of conduct as well which covers policy matters in one document. That, you say, was triggered by the advent of the Bribery Act. How much input did you have into that process, the code of conduct coming into being?

  • A lot. The Evening Standard, which I also manage, has HR help and legal help from DMGT, its shareholder, but when IPL was sold, all of the corporate overstructure was removed and documentation needed to be updated. The commercial teams have been merged between the two businesses, so as the head of both businesses, I was the only person who could actually be involved to a deep degree in terms of trying to pull together policies. So yes, I was very much involved in it.

  • Does the code of conduct apply across the titles or just to the Independent?

  • You go on to explain in paragraph 18 that you consider your role to be absolutely fundamental and critical to all of the business strategy, et cetera, and central to corporate governance, and I think I am pretty much aware of everything that happens in that respect."

  • I certainly am now, yes.

  • Okay. What do you mean you certainly are now?

  • Because the history of editorial separation and a business like ours, which has been losing a lot of money in threat of going out of business, there are different focuses and priorities. If the phone hacking hadn't gone on, I think we'd have probably taken a longer time to get our code of conduct out, but it was very necessary and important that we did it for both businesses because it pulled together and created clarity on a range of issues that were cropping up across the industry and a couple that were occurring in our business.

  • Could I ask you allow to look at the code of conduct, please. It's in the exhibits to Mr Malhotra's statement. If you look behind tab 4 in this bundle, you'll find exhibit 1 to Mr Malhotra's statement and you'll find an extract from the code of conduct. I'm going to ask some questions about this because it is referred to in your witness statement.

  • Are you happy with that?

  • If there's any question you feel is better addressed to Mr Blackhurst, then please tell me.

  • Just glancing through it, we can see there are sections on anti-bribery. There's also a section on data protection, much like the Financial Times code we were looking at. Then there's a section under "Editorial provisions" on the third page which is headed "Stage one, preparing for publication". Do you see that?

  • Without reading it all out, I'd like to look at the section headed "Putting the story to the subject", which is over the page on page 4.

  • "It is good journalistic practice that any potentially damaging story is put to the subject before publication."

    Is this a kind of prior notification policy?

  • It's -- the code of conduct was put together around the time of the change of the editors, where Simon Kelner stood down and Chris Blackhurst took over, and it was created in conjunction with the legal department. We meant it to be not an absolute document. It would be one that would be improved in time. This is one thing we've looked at subsequently which I don't think we're all in agreement on. I know the editor has very clear views or has different views to what's stated here now that he's in the seat, so I think I might leave that to him to comment on.

  • I'll make a note to myself that I need to ask him. Could I ask you about stage 2, which is over on page 6, "Pre-publication". This is under the heading "Attribution".

  • Were you here during the evidence of Mr Barber just now?

  • You'll have heard what he said about attribution of material. What's the position at the Independent? Let's just focus on the Independent for the moment.

  • I'll give a comment. I think the editor will give a more in-depth comment on this.

    We started to highlight some these issues around the Johann Hari case, which came up just before this publication, and we have stressed certain issues that we think are incredibly important that might not have been clear before. This was the position we took when we put the code of conduct together. I think we still hold it, but I think the editor can probably enlarge on that.

  • I think I might ask my other questions relating to the code of conduct to Mr Blackhurst.

    Can I pick you up on something you say at paragraph 30 of your statement.

  • You're dealing healer with a question about the use of private investigators. Do you see that?

  • You're asked whether, to the best of your knowledge, your newspapers have used, paid or had any connection with private investigators.

  • And you say to the best of your knowledge no, and then at paragraph 30 you say this:

    "If this question covers payments to freelancers, then yes, IPL does make payments to freelancers. However, to my knowledge, IPL would not use a freelancer who paid for information from private investigators or public officials. We do not run those kind of stories."

    What does that mean, "run those kind of stories"?

  • I think that's about the secondary sources and primary source argument. I think the editor will confirm that we mainly run primary source-type stories and therefore we know all the sources involved. I think that's mainly the line that's taken there.

  • I understand. Have you, in your time at IPL, ever considered the possibility of appointing a readers' editor?

  • I think we'd like to --

  • You globally, rather than you personally.

  • No, I think we're in the game of trying to reduce our costs and give more responsibilities to fewer people, so -- we're very, very tight on people and costs, so I don't think we're looking to expand our remit.

  • Is it a question of cost rather than principle?

  • I think the argument about the editor being the readers' editor is probably the best answer. That's certainly the case on the sister publication, the I, which is very, very interactive with readers and the whole dialogue is talking about reader comments and feedback on a daily basis, online and within the paper. Less so on the Independent for historical practice, I think, but we're not looking to take on more people if we possibly can, I think is the best way of replying to that.

  • Is there anything you'd like to add?

  • Thank you very much then.

  • Thank you very much indeed.

  • Mr Malhotra next, please.