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September 12, 2013 12:05 pm
Police are investigating whether Mirror Group Newspapers is criminally liable for alleged phone hacking by previous employees on the Sunday Mirror newspaper, the media company has disclosed.
In a statement to the stock market, Trinity Mirror noted that MGN, its subsidiary, had been notified by the Metropolitan Police that “they are at a very early stage in investigating whether MGN is criminally liable for the alleged unlawful conduct by previous employees in relation to phone hacking on the Sunday Mirror”.
The statement added: “The group does not accept wrongdoing within its business and takes these allegations seriously. It is too soon to know how these matters will progress and further updates will be made if there are any significant developments.’’
Trinity Mirror is currently facing four civil claims related to alleged phone hacking, including from Sven-Göran Eriksson, the former England football manager, and Abbie Gibson, a former nanny to the children of former footballer David Beckham. The company has always denied wrongdoing and is defending the claims.
Analysts say Trinity Mirror’s shares have been weighed down by a “hacking discount”, reflecting investors’ concerns about the threat of potential compensation payments and the prospect of more civil lawsuits.
Shares in Trinity Mirror, which plunged to a four-month low of 81.5p in March following the arrests, were down 4 per cent at 123.5p on Thursday.
In March, two current and two former senior journalists at MGN were arrested in the first police action over alleged phone hacking by people not connected to titles owned by News UK, Rupert Murdoch’s UK publishing arm.
A fifth journalist who worked at the Mirror Group as well as the now-defunct News of the World, has been charged with phone-hacking offences.
The Trinity Mirror developments follow the police investigation into phone hacking by journalists at the News of the World.
Mr Murdoch’s News UK, which owned the News of the World and still owns the Sun newspaper, has settled more than 200 civil lawsuits from victims of phone hacking and has spent at least $270m on legal and other fees relating to “UK newspaper matters” and paid $27m in civil settlements, according to filings.
The phone-hacking scandal has shaken the highest levels of Mr Murdoch’s media group, and triggered the closure of the News of the World in 2011 as well as scuppering its bid for full control of BSkyB.
A number of former News of the World journalists including Rebekah Brooks, the ex-chief executive of News International, have been charged and are due to stand trial next month facing allegations of conspiracy to intercept voicemails.
Alex DeGroote, media analyst at Panmure Gordon, said that while investors had already priced in much of the potential fallout from the phone-hacking allegations, the latest development would nonetheless add to their concerns.
“Looked at positively, this probably brings forward the point at which we can draw a line in the sand,” he said.
“The downside is that it’s a negative development that the company moves from just facing civil litigation from individuals to being pursued as a corporate entity.”
Additional reporting by Robert Cookson
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