The Australian apologises for claiming Ten chairman sold shares before calling in administrators

The Australian newspaper has issued a comprehensive apology to the chairman of Ten Network David Gordon after wrongly claiming that he had sold most of his shares in the company in the months before it went into administration.

Yesterday’s story by media editor Darren Davidson, which led The Australian’s Media section, wrongly alleged that Gordon had sold 88% of his shares in the troubled company before it called in the administrators. The newspaper also published online a series of reader comments on the story suggesting that the alleged actions amounted to insider trading.

The mistake – one of the biggest factual blunders since Paul Whittaker became the newspaper’s editor-in-chief 18 months ago –  came about because Ten consolidated its share register a year ago, swapping ten shares for one, reducing every shareholder’s number of shares by 90%.

Yesterday’s incorrect story about David Gordon

The “exclusive” article wrongly suggested that Gordon had not been acting in the interests of other shareholders. And it also incorrectly suggested that Ten’s board “may have not undertaken scenario analysis on cashflow modelling”.

Davidson did not check his facts with Gordon before publishing, stating in the article: “A spokesman for David Gordon and a spokesman for Ten did not respond to The Australian’s request for comment”.

Davidson – featured in an advertising promotion for subscriptions To The Australian – did not confirm story

Readers of The Australian reacted to the incorrect information with a number of comments calling for the authorities to be informed, although at least one accused Davidson of wrongly “sullying” Gordon’s reputation.

The angry reader comments were based on incorrect information

The blunder was a particularly sensitive one for the newspaper because owner News Corp’s boss Lachlan Murdoch is a shareholder of Ten and a guarantor of its $200m share facility which comes due later this year.

Murdoch and fellow shareholder and guarantor Bruce Gordon (no relation to David Gordon) have publicly revealed that they are cooperating over future ownership options of Ten.

A legal letter from the duo is reported to have been a key factor in the board putting Ten into administration, rather than continue to work through its rescue plan. Yesterday saw the first meeting of Ten’s creditors.

If the government succeeds in its current attempts to force through changes to the media ownership laws, News Corp is seen as a frontrunner for taking control of the broadcaster.

The article in The Australian was the first time the newspaper has so publicly attacked the network’s management. Lachlan Murdoch’s representative on the board, Siobhan McKenna, resigned from the board in March.

Within a few hours of publication, the story was removed from the newspaper’s website. The correction – published online yesterday evening, and on page two of today’s print edition of The Australian – states:

An article in The Australian on Monday (“Ten chairman sold down stake”, page 23) incorrectly stated that Network Ten chairman David Gordon sold 88 per cent of his shareholding in the company before it went into voluntary administration. The Australian acknowledges that Mr Gordon did not sell any shares in the company and in fact his shareholding increased in the period before the company was placed into administration. The reduction in the number of shares held was due to a 10:1 share consolidation applying to all shareholders, which took effect on January 25 last year. The Australian acknowledges that its statement was inaccurate and untrue and apologises to Mr Gordon. The article also stated that Mr Gordon and the Network Ten board failed to conduct scenario modelling on cashflow analysis and were caught unprepared when the three main shareholders decided not to back a financial restructuring of the broadcaster. The Australian also acknowledges that both of these statements were inaccurate and untrue and apologises to Mr Gordon and the board.

In March, the ABC’s Media Watch TV program dedicated a segment to a number of incorrect “exclusives” published by Davidson about the ABC. It included predictions that Sky News boss Angelos Frangopoulos would be the public service broadcaster’s next boss (he wasn’t); that British executive Jay Hunt would be the ABC’s next boss (she wasn’t either); that actual new ABC boss Michelle Guthrie would appoint a content director (she didn’t); and that Danny Gilbert would be the ABC’s next chairman (he wasn’t).

Meanwhile last year, Davidson claimed that “parasite” bloggers were stealing his stories by pretending to be him.

Also last year, Fairfax Media boss Greg Hywood responded to articles by Davidson issuing a statement saying of News Corp: “They dress up their bile as news and bore the rest of the industry with their seemingly endless appetite for gutter dwelling.”

In 2014, a confrontation between Davidson and the publisher of MailOnline Martin Clarke at a party in Cannes was widely reported after he claimed Mail staff wouldn’t give him back his iPad and poured beer over him.



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