Court rules for BIL

Press, 6 February 1986, Page 10

Court rules for BIL

By

Simon Louisson

in

Wellington

The High Court has reversed the decision of the Commerce Commission and allowed Brierley Investments permission to increase its shareholding in N.Z. News to more than 50 per cent. BIL was allowed its case by the court, led by the Chief Justice, Sir Ronald Davison, on condition that it ensured editorial independence for N.Z. News publications (including “The Star” in Christchurch and the “Auckland Star”), that it ensures no discrimination among business advertisers, and that these conditions be conveyed to N.Z. News staff in writing.

The commission refused BIL permission to increase its holding almost a year ago despite a report from the Examiner of Commercial Practices recommending approval of the take-over proposal. The commission decided that a maximum of 40 per cent ownership by a' single person or company in any

one of the “big three” newspaper groups is the maximum which should be permitted. Much of the argument in the case centred on whether 40 per cent represented effective control. The court said there was no magic in the figure 40 per cent and control depends not only upon the shareholding of that company but the nature of other shareholdings and the influence directors exercise on the board. The court decided that the “possibilities” of control referred to by the commission were not “probable” or likely to happen and that BIL "has actual de facto control of N.Z. News, Ltd.” The acquisition of a majority shareholding by BIL will therefore make no difference to the public interest, the court ruled. On the matters of editorial independence raised by the commission, the court said that there was no indication how the BIL proposal would affect editorial independence or what perceived dangers to such independence were likely to arise. “The decision is significantly silent on this topic,” said the court. “It falls far short of making any finding that there exists a danger to

editorial independence such as to make Brierley’s proposal contrary to public interest.” No decision was made by the court to consider the question of “editorial freedom” because of conclusions reached on other matters. The conditions imposed on BIL reflect the findings of the Royal Commission on the Press in the United Kingdom. These include: O The right to reject material provided by central management or editorial services. 0 The right to determine the contents of the paper within reasonable bounds. © The right to allocate expenditure within a budget. G The right to carry out investigative journalism. © The right to reject advice on editorial policy. © The right to criticise the paper’s own group or other parts of the same corporate organisation. The BIL chief executive, Mr Paul Collins, said that while the decision is in the company’s favour it is not without some cost. In the 18 months since BIL first applied for approval, the price of N.Z. News shares has virtually doubled to 645 c.