'Statesman' in new fight for life

Owner pulls out after refinancing plan is vetoed. Chris Blackhurst reports
Click to follow
Offers are being invited for the ailing left-wing weekly New Statesman, following the decision of Philip Jeffrey, its millionaire owner, to withdraw day-to-day backing.

Grant Thornton, a firm of City accountants, will be appointed administrators to run the socialist magazine, founded by Sidney and Beatrice Webb over 80 years ago. The administrators will seek the best possible price for New Statesman which has been losing money at the rate of pounds 6,000 a week.

Mr Jeffrey, a Labour supporter, has refused to continue providing a pounds 125,000 credit facility, used to keep the publication afloat. Faced with his withdrawal, the board has had no choice but to put the magazine's holding company into administration.

The decision to pull the plug was taken after an acrimonious few days which saw Mr Jeffrey's plans to inject new capital into the magazine blocked by its five independent shareholders. Under New Statesman's constitution, the five so-called "E" shareholders - who include Margaret Hodge MP, Helena Kennedy QC and Neal Ascherson, the journalist - have the power to veto changes of editor and ownership.

Mr Jeffrey's refinancing plan involved closing down the company which owned the magazine and transferring the title to a new company with a new constitution. This new constitution would scrap independent safeguards, including the five "E" shares - something the independent shareholders were not prepared to countenance.

He secured the approval of other shareholders at a series of meetings last week. However, the independents refused to go along with his plan, claiming it would result in his acquiring total control - something under the constitution they were obliged to prevent.

Mr Jeffrey said yesterday he very much regretted having to take such drastic action but blamed the five for being intransigent and holding power without responsibility. "What has happened is that 94 per cent of the ordinary shareholders voted to support the reconstruction. The independent shareholders voted against, and the company has today moved into administration."

The magazine, he added, "is no longer in my hands. I am sorry it has come to this".

An offer of pounds 875,000 of new money from Mr Jeffrey, who made his fortune from the Fads chain of DIY stores, has now lapsed and, he said, may not be renewed. "If other offers come in and they are from consortia of the left, I would be happy to stand aside." So far, he claimed, his involvement in the magazine had cost him pounds 600,000 with no guarantee he would get it back.

Among those who may come forward are Derek Coombs, the former Tory MP and millionaire, beaten by Mr Jeffrey for control two years ago, and Philip Whitehead, the ex-Labour MP and television producer, who, along with two other people, holds the right of first refusal over any change in ownership. The bidders' path will be smoothed by the recent resignation of Steve Platt as editor. Mr Platt, a frequent critic of Tony Blair and editor for the past five years, is expected to stay on until a new owner can be found.

Mr Ascherson, a senior journalist on the Independent on Sunday, said Mr Jeffrey had "absolutely refused to have any structure which interfered with his total control". Other publications like the Economist and the Observer, Mr Ascherson said, had similar structures of independent trustees without any problem.

Ms Hodge said the five would not stand in the way of a refinancing. But they failed to see why it was necessary to remove them completely.