By Dominic Ponsford
The PCC has refused a request for it to re-open its case into the City Slickers share-dealing scandal at the Daily Mirror of 1999/2000.
But it has expressed “regret” over the way it was misled by Trinity Mirror, and subsidiary Mirror Group Newspapers, over the value of shares bought by then editor Piers Morgan (pictured).
News from the PCC follows the conviction of columnists Anil Bhoyrul and James Hipwell for insider dealing in February this year.
Media commentator Roy Greenslade called for the re-opening of the PCC’s enquiry into the affair because the watchdog’s original report said Morgan had bought £20,000 worth of shares for Viglen, tipped a day later in the paper, but it emerged at the trial that he actually bought £67,000 worth of shares.
The original May 2000 PCC judgement severely censured all three Mirror journalists for breaching the Editors’ Code.
According to the PCC, Greenslade wrote to several individual members of the Commission uging them to re-open the case.
He claimed that several named Trinity Mirror directors “conspired to give false evidence to the Commission” by telling it that Morgan had only bought £20,000 worth of Viglen shares.
Greenslade told the Commission “the implication must be that Trinity Mirror, by minimising Mr Morgan’s share-buying, was attempting to avoid an even more severe adjudication from the PCC and, of course, an even greater outcry from the rest of the media. In other words it was a corporate cover-up in order to preserve Mr Morgan as editor despite his flagrant abuse of his position.”
The PCC wrote to MGN to find out why it was not told the true value of Morgan’s Viglen shares.
The company replied that Morgan had told them of the true value of his Viglen shares: £67,000. MGN told the Commission that it came to believe in 2000 that Bhoyrul and Hipwell were not telling them the truth about their own behaviour and that they were changing their stories by introducing “facts” they had learned from newspapers.
MGN said that it become “a touchstone of the veracity of Messrs Bhoyrul and Hipwell as to whether they could show independent knowledge of the total of £67,000.”
MGN added: “If they could, it would also indicate whether Mr Morgan was telling the truth when he denied any pre-purchase conversation with them about Viglen. It was therefore decided to keep the higher figure confidential.”
MGN said it judged that withholding the £67,000 figure would “make no difference to the question of whether the Code of Practice had been broken". The question of a “corporate cover-up” was “strongly contested” by MGN.
The PCC said: “The Commission considers that the logic behind MGN’s strategy was weak. Even if MGN could show that someone had knowledge of the amount which had been kept confidential, it would not necessarily follow that Mr Morgan could be shown to be involved in insider trading.
“Other explanations might be possible. Mr Morgan had denied that he ever knew that the Slickers’ column would tip Viglen the next day. He had explained the reasons why he and his wife had invested a large sum of money on the shares. He had not attempted to cash in the shares to take a quick profit. Any prosecution would probably have had to depend on the evidence of Messrs Bhoyrul and Hipwell, who had changed their stories several times and subsequently were themselves convicted.
“On the other hand, the Commission has seen no evidence to lead it to disbelieve that MGN’s strategy was indeed pursued by the company at the time, even though the reasons for it may have been flawed.
“There did not appear to be any evidence to support the contention that the motive for not revealing the higher figure was to try to protect Mr. Morgan or to minimise the Commission’s criticisms. Had this been the case, MGN could have achieved its objectives simply by asking the Commission to abandon its investigation into the Viglen issue in view of the conflict of evidence, the possibility of civil proceedings and the DTI inquiries as to possible criminal offences.
“Nonetheless, it was a matter of regret to the Commission that MGN had – for whatever reason – submitted a partial account of Mr Morgan’s share dealings to the Commission which had the effect of misleading it. The company should have explored other means of achieving what it wanted to do rather than pursuing this course.”
The PCC further criticised MGN for not making a public statement, or contacting the PCC, after the true £67,000 level of Morgan’s share-holding became public.
It concluded: “The Commission has decided that there are no grounds to reopen its 2000 adjudication. The value of Mr Morgan’s Viglen purchases was irrelevant to its findings on that occasion. As a result of the inquiries it has made, the Commission has not found evidence to suggest that directors of MGN had conspired to present untruthful evidence to the Commission to protect Mr Morgan and to minimise the Commission’s criticisms".
It added: “The Commission acknowledged that MGN had acted rapidly in dealing with an unpleasant situation and had instituted necessary inquiries and changes. Messrs Bhoyrul and Hipwell had used their position to enrich themselves. Mr Morgan, as editor, had totally failed to control the situation, while buying shares in a way which flouted the Code. The Commission’s forthright condemnation of what was happening remains clear and unambiguous and is unaffected by MGN’s omission.”