Telegraph owners' £250m HSBC loan raises fresh questions over coverage

By The Guardian

The owners of the Daily Telegraph secured a £250m loan from HSBC for a struggling corner of their business empire shortly before the newspaper’s reporters were allegedly “discouraged” from running articles critical of the bank, the Guardian has learned.

The timing of the loan deal for Yodel, a loss-making parcel delivery firm owned by the Barclay brothers, raises fresh questions over the influence of commercial considerations on the Telegraph’s editorial coverage of HSBC.

The deal was completed on 14 December 2012, company documents show. The paper’s former chief political commentator Peter Oborne alleged this week that there was a sea-change in its editorial treatment of the bank from early 2013.

The documents show that Sir David and Sir Frederick Barclay had to formally give a personal financial guarantee as additional security for the loan facility.

The paper’s editorial judgment over HSBC has been called into question this week by Oborne, who accused the paper of a “fraud on its readers” in an excoriating resignation statement.

Specifically, he claims that the Telegraph’s coverage of the bank changed abruptly just over two years ago. “From the start of 2013 onwards stories critical of HSBC were discouraged,” he said.

Yodel refinanced in mid-December 2012 with Europe’s biggest bank. As security, the bank took a charge over almost all the Yodel business - meaning the bank could take control of the parcel delivery group should the latter breach its borrowing commitments.

The new HSBC loan was used to repay previous borrowings from Lloyds Banking Group. The Yodel business made a loss of £112m for the year to 30 June 2013. Yodel filings show an outstanding amount of £242m was due to on the HSBC loan at the end of June 2013 and there are no filings since then suggesting the debt has been repaid.

Contacted by the Guardian, the Barclays family declined to comment on the loan, but a source close to the family dismissed suggestions that the Telegraph’s coverage could have been influenced by a loan from HSBC. The source also pointed out that the family’s businesses had borrowings with many other banks.

The Barclays camp believe a lot of inaccuracies have been written about them in recent days, though they have not expanded on what these are.

Oborne parted company with the Telegraph this week, going public, he said, in protest at its coverage of the HSBC scandal. The Telegraph veteran has called for an independent inquiry into the newspaper’s editorial guidelines because of what he sees as a lack of reporting on the HSBC affair. The Guardian, the BBC, Le Monde and 50 other media outlets revealed how the bank’s Swiss banking arm helped wealthy customers dodge taxes and conceal millions of dollars of assets, while circumventing domestic tax authorities.

Revelations about the controversial banking affairs of some of HSBC’s wealthiest clients have dominated headlines across the British media in recent weeks, but featured only fleetingly in the Telegraph, Oborne argues.

Yodels’ directors, who include Sir David Barclay’s sons Aiden and Howard, admit in the firm’s accounts that the parcel delivery trade is “a rapidly changing marketplace”. While that presented opportunities, there were too many suppliers in the industry, leading to “a high degree of competition”.

The accounts show the struggling business was able to qualify as a “going concern” for accounting purposes thanks to the willingness of its Jersey-based parent, another company in the Barclays’ investment empire called LW Corporation, to provide financial support. Companies in Jersey are not required to file accounts.

Earlier this week Oborne claimed that HSBC had suspended its advertising with the Telegraph after it ran an investigation in November 2012 based on leaked details of personal accounts held with HSBC in Jersey.

He also claims that reporters were ordered to destroy all emails, reports and documents related to the HSBC investigation. “This was the pivotal moment,” Oborne wrote.

He attributed the change to an effort to win back advertising. He said he had been told by an extremely well informed insider that HSBC’s advertising spend was extremely valuable. “Winning back the HSBC advertising account became an urgent priority,” Oborne said.

In a statement responding to Oborne’s allegations, a Telegraph spokesperson said it would not comment on individual commercial relationships, but continued: “We aim to provide all our commercial partners with a range of advertising solutions, but the distinction between advertising and our award-winning editorial operation has always been fundamental to our business. We utterly refute any allegation to the contrary.

“It is a matter of huge regret that Peter Oborne, for nearly five years a contributor to the Telegraph, should have launched such an astonishing and unfounded attack, full of inaccuracy and innuendo, on his own paper.”