Barclay family hits back at Telegraph £278m loan ‘black hole’ claim

The Telegraph recorded a loss of £240m as a result of loans to Barclay family ‘unlikely to be repaid’ (Getty Images)

The Barclay family has hit back at claims that it left a £278m “black hole” in the Daily Telegraph group’s finances after taking out a series of untraceable loans.

In a new twist to the protracted saga of the paper’s ownership, the Telegraph reported that the company could face an HMRC probe for potential tax fraud over the payments.

Telegraph Media Group (TMG) accounts, filed this week, showed that the company had crashed into the red with a record £244.6m loss, despite a 35 per cent rise in operating profit.

The Telegraph said the “black hole” was the result of company loans extracted by the Barclay family which are “unlikely ever to be repaid”.

Attempts to trace the cash via the complex network of companies controlled by the Barclays have been unsuccessful, TMG reported.

The company had been forced to set aside £277.6m to cover the loans transferred between TMG and other parts of the Barclay family empire.

TMG said directors recently placed in charge of the Telegraph, due to be put up for auction this summer, have begun a review of “potentially irregular transactions” over seven years.

Specialists from HMRC and the National Crime Agency, which acts as an information clearing house for financial authorities including the Serious Fraud Office, have been in contact with the company and its advisers, TMG said. It added that it is not clear if investigations have been launched.

“There is a potential risk of future possible claims against the company in respect of such transactions,” the TMG review warned.

The Barclay family, which retains ownership but no control over the titles ahead of a revived sale process, rejected any suggestion of wrongdoing.

A spokesperson said: “The Barclay family is proud of its track record of investment in Telegraph Media Group, which under its ownership has been transformed into a successful digital and print media brand, with over one million subscribers.”

“Throughout the family’s ownership the business has been managed responsibly and within all legal frameworks, with all accounts approved by auditors.”

The Telegraph papers and the Spectator magazine have battled an ownership crisis since June 2023, when the titles were seized by Lloyds bank after the Barclay family failed to repay £1.16bn in debts.

The debts were later repaid by a UAE-backed consortium RedBird IMI which had hoped to buy the group. It was forced to walk away when the Government legislated to block foreign state ownership of UK newspapers.

However the “black hole” should not impact on the impending resale of the Telegraph titles.

Telegraph Media Group could be liquidated and the assets and staff placed into a new holding company to reassure bidders they would not be exposed to Barclay-era controversies.

The ongoing sale process has created what new chief executive Anna Jones, who joined in January, called “a backdrop of uncertainty surrounding its future ownership”.

Potential bidders to buy the Telegraph and Spectator are due to receive an Information Memorandum, signally the relaunch of the process, this month.

RedBird IMI, preparing to launch a new auction, values the Telegraph titles at around £600m. Potential bidders include Paul Marshall, the Brexiteer hedge fund boss who co-owns GB News.

The Murdoch-owned News UK has indicated it will bid to buy The Spectator, which could command a fee of £80m.

In its accounts, TMG said the Barclays loan had pushed it to a £244.6m loss for the 2023 calendar year.

The figure includes more than £20m in fees paid to advisers over the paper’s contested sale. A further £55m relates to a corporate loan.

TMG said the titles’ underlying performance was strong, with subscriptions across the group reaching one million, boosting digital revenues.

In a statement with its published 2023 accounts, the Telegraph said that as part of the attempted sale, it carried out a “detailed review” of historic transactions between TMG and “related parties”.

The review found “potential irregularities in the recording of such transactions”.

The Telegraph was approached for comment.