A Saudi Arabian investor has taken a significant stake in the Independent, the digital news website owned by Russian businessman Evgeny Lebedev, as part of a push into the Middle East by the group which has plans to open an Urdu and Arabic version of the website.
Mohamed Abuljadayel, a 42-year-old Saudi Arabian national, has acquired a stake of 30 per cent in Independent Digital News and Media, the website’s parent company, including shares sold to him by smaller shareholders.
Mr Lebedev, the son of former KGB agent turned billionaire businessman Alexander, has sold down his stake from about 60 per cent to 41 per cent.
A third investor, Justin Byam Shaw, who is chairman of the Independent, has sold down his stake from just over 30 per cent to 26 per cent.
One senior executive told the FT that while Mr Lebedev was still the largest shareholder he no longer had majority control. It was also revealed that one of the reasons Mr Lebedev had done this deal with Mr Abuljadayel was to provide backing and investment for a push into the Middle East by the Independent, which has plans to open an Urdu and Arabic version of the website.
The Independent did not disclose how much Mr Abuljadayel had paid for his stake in the UK media business, but the website Middle East Eye, which first reported the news, said the deal valued the website at about £100m. This could not be independently verified.
Although Christian Broughton, the Independent’s editor, said a shareholders’ agreement was now in place that guaranteed the website’s editorial independence, the deal was likely to prompt concerns from critics of Saudi Arabia’s record on human rights and media freedom.
The paper was founded 30 years ago to shake up the partisan British press with an emphasis on neutral political coverage, world-class foreign reporting and a groundbreaking use of pictures.
Charlie Beckett, a media professor at London School of Economics, said: “No one invests in journalism for easy profits, so the motive must be either philanthropic or a desire for status and influence.
“Saudi and the Middle East generally has a terrible culture of press freedom, so one has to worry about the value of any editorial independence safeguards, but I doubt the Independent is about to become a propaganda platform overnight.”
The move comes nearly 18 months after the Independent shut down its printing presses to exist solely online. At the time the newspaper was making huge annual losses — in 2015 Independent Print Ltd made a pre-tax loss of almost £7m and had net liabilities of £69m.
But Mr Lebedev told the Financial Times last year that the company was now profitable and this month it reported a pre-tax profit for the year ended October 2016 of £1.6m.
The website has also more than doubled its online audience since closing the newspaper and has seen an upsurge in readers in the US.
Mr Broughton said the website had taken a tough stance on reporting about Saudi Arabia and the Middle East and that would not stop following the sale of the stake to Mr Abuljadayel.
“There is a shareholder agreement which now says in categorical cast iron terms that no shareholders can influence the editor of the Independent,” said Mr Broughton. “You only have to look at the Independent’s editorial line on Saudi Arabia. We take a strong view on these things and report on the whole region as we see fit.
“What it does mean is combination of broader shareholder base and editorial independence really sets us up for the future.”
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