Telegraph elevates Southgate to top finance role amid government probe

A Telegraph Media Group executive has been elevated to the company’s top finance role as the initial phase of two government-commissioned probes into the broadsheet’s sale nears its conclusion.

Sky News understands that Cathy Southgate has been appointed acting chief financial officer, replacing Cormac O’Shea, who will leave next month.

According to a memo sent by Nick Hugh, the Telegraph chief executive, on Friday morning and seen by Sky News, the audit and senior accounting officer functions will be overseen by Stephen Welch, one of the parent company’s independent directors.

The announcement comes amid protracted uncertainty about the future of two of Britain’s most influential newspapers, with RedBird IMI, an Abu Dhabi-backed vehicle, having agreed a deal to take ownership of the titles.

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Ofcom and the Competition and Markets Authority have been instructed by Lucy Frazer, the culture secretary, to report back to her on the takeover’s implications for press freedom later this month.

This week, Sky News revealed that RedBird IMI had informed the independent directors that it believes it would retain control of the Telegraph’s destiny even if its own deal is blocked.

Under the terms of a public interest intervention notice (PIIN) issued by Ms Frazer, RedBird IMI is prohibited from exerting any influence over the titles while the investigations are ongoing.

That includes the removal of key executives and editorial staff or any attempt to merge the Telegraph with other assets.

It was unclear whether the company had to seek Whitehall approval for Ms Southgate’s appointment.

Mr O’Shea, who did not sit on the board, is the most senior executive so far to have signalled their departure since the Telegraph’s holding company was forced into receivership by Lloyds Banking Group last year.

The high street lender effectively ousted the Barclay family as owners of two of Britain’s most influential newspapers after nearly 20 years, following a long-running dispute over the repayment of a £1.16bn debt.

Just over half that sum is a loan from RedBird IMI, with the remainder solely from IMI.

The loans and interest were repaid earlier after the Barclay family structured a deal with RedBird IMI, which is majority-owned by Sheikh Mansour bin Zayed Al Nahyan, the ultimate owner of Manchester City Football Club.

Spearheaded by Jeff Zucker, the former CNN president, RedBird IMI has notified the independent directors of its intention to exercise an option to convert £600m of the funding provided to Barclays from debt into equity ownership of the Telegraph.

The remainder of the loan is secured against other, unspecified, Barclay-owned assets.

RedBird IMI’s plans have sparked uproar among many Conservative MPs and peers who have argued that handing control of the traditionally Tory-supporting broadsheets could undermine media freedom.

A number of prominent Telegraph journalists and columnists have also used the newspaper’s pages to campaign against the takeover.

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The Times reported last month that TMG’s independent directors had alerted Whitehall to possible irregularities in the accounts of the family’s media assets, with the National Crime Agency said to have been informed.

The UAE-based vehicle has insisted that it would preserve the newspaper’s editorial independence and offered to give the government a legally binding assurance of this intention.

RedBird IMI’s move to fund the loan redemption circumvented an auction of the Telegraph which drew interest from a range of bidders.

The hedge fund billionaire and GB News shareholder Sir Paul Marshall, Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, had all hired advisers to assemble offers for the newspapers.

A spokesman for TMG declined to comment beyond Mr Hugh’s memo, while the Department for Culture, Media and Sport has been contacted for comment.