Margareta Pagano: Trinity Mirror’s Simon Fox must box cleverer than this

The boss of one of biggest newspaper groups cannot afford to sound so dismissive of phone-hacking claims. Has he learnt nothing from News International?

Simon Fox, the new chief executive of Trinity Mirror, remarked in an email to staff last week that he was “deeply concerned” by the huge amount of publicity generated by the four new legal claims which were lodged against the newspaper group over phone-hacking. His precise words were that he was deeply concerned in the “absence of evidence how four unsubstantiated claims can attract publicity of such magnitude”.

It was a brave thing, and possibly a questionable statement, for Fox to make and I’m sure he’s havingsecond thoughts about it. If he, and his board, had done their proper due diligence, they should know that phone-hacking is alleged to have been rife at Trinity Mirror newspapers for years. According to sources, it was the Mirror’s success in getting the Ulrika Jonsson and Sven-Goran Eriksson affair story by phone-hacking, that prompted the News of the World to adopt the practice because it was so jealous of the Mirror’s success.

Investors certainly understood the full repercussions of the legal claims, selling  out as fast as they could. By Friday, shares closed down 20 per cent at 53p, valuing one of the UK’s biggest newspaper groups at just £132m. If there are successful legal actions – and if the police do press charges against former employees – this could have a negative impact on the Mirror’s already difficult financial position.

While newspapers are going through their own revolution, Trinity Mirror is fundamentally a sound group with an enterprise value of £360m, double its present stock market value. It owns 260 titles and employs 6,000 staff around the country – so it’s critical that Fox gets this current crisis right before any more jobs in the industry are chopped because of appalling management.

It’s why some of the biggest investors fear more damaging news could push the share price down further, hurting its banking covenants and making it harder to  service its £197m debt. More shocks could even lead advertisers to walk, another lesson from the News of the World affair.

That’s why it’s vital that Fox, and the new chairman, David Grigson, clean up this mess. Instead of moaning about negative publicity, he should have announced his own independent investigation. So he was made to look weak, and forced by investor pressure to launch an internal inquiry. What’s so troubling about Fox’s reaction is that he just doesn’t seem to get just how potentially inflammable this growing scandal could be. Or prefers to ignore it.

Ironically, Fox and Grigson are the new boys on the street so they had the chance to start with a fresh slate. Investors were ready to give them the benefit of the doubt. But not if they continue as they are. There’s lots they could do: appoint a QC to handle an inquiry, possibly put money into court ahead of any claims or set aside provisions for compensation.

Investors are sick of the phone-hacking denials, when even former staff – like James Hipwell – admitted as much to the Leveson inquiry. On past record, they are right not to believe management. Let’s not forget that it was the previous chief executive, Sly Bailey, who told Leveson she didn’t launch an inquiry because there was no evidence that Mirror Group journalists had hacked into phones. Paul Vickers, the legal director and a former barrister, is the only one so far who has investigated “editorial procedures” but he didn’t look at the past. It was unbelievable then, and is even more unbelievable now.

Has Fox asked Vickers, who has been at the Mirror for donkey’s years, what the past practices were?

Fox should show more cunning than this if he is to give shareholders greater confidence in future.

Carroll shows a maturity lacking in sniping investors

Ever since Cynthia Carroll set foot in Anglo-American six years ago, the American geologist has been subjected to vicious and misogynist sniping.

Mining is a tough industry but even for such a macho one, the ranting was offensive; specifically from ex-Anglo executives who suggested she suffered from sexual frustration. Jealousy and spite seem to be behind much of the criticism as Carroll went into Anglo to blow out cobwebs. And so she did; shaking up old-fashioned practices, making the mines more environmentally friendly and ensuring the health and safety of miners.

But this also made her enemies. The timing of her arrival didn’t help either – she took over as chief executive just before the financial crash, which saw the commodities boom burst, hitting all the world’s biggest mining groups. Anglo’s share price is down 40 per cent since then – but so are the shares of rival miners, so she hasn’t done too badly.

Yet, that hasn’t stopped investors griping to chairman, Sir John Parker, for months now. The situation hasn’t been helped by problems at Anglo’s South African platinum mines or the overspend in Brazil; events outside Anglo’s control.

Sir John has been unwavering in his support but it appears Carroll decided its better to go now rather then let revolt turn into war. Knowing when to leave a top job is a sign of maturity. Six years as boss is long by today’s standards and she’s got two teenage children going to the US for college to be closer to.

Judging Carroll’s legacy is muddied by her gender; a man in the same position would not have been treated like she has been. She cracked the glass ceiling but couldn’t cut the platinum one. Investors voted with their feet on her departure and the shares rose. Sadly, that says it all.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?
Season's finale brings the end of an era for top coaches and players across the continent

The end of an era across the continent

It's time to say farewell to Klopp, Clement, Casillas and Xavi this weekend as they move on to pastures new, reports Pete Jenson
Bin Laden documents released: Papers reveal his obsession with attacking the US and how his failure to keep up with modern jihad led to Isis

'Focus on killing American people'

Released Bin Laden documents reveal obsession with attacking United States
Life hacks: The innovations of volunteers and medical workers are helping Medécins Sans Frontières save people around the world

Medécins Sans Frontières's life hacks

The innovations of volunteers and medical workers around the world are helping the charity save people
Ireland's same-sex marriage vote: As date looms, the Irish ask - how would God vote?

Same-sex marriage

As date looms, the Irish ask - how would God vote?
The underworld is going freelance: Why The Godfather's Mafia model is no longer viable

The Mafia is going freelance

Why the underworld model depicted in The Godfather is no longer viable