The Sunday Express has agreed to pay ‘substantial’ but undisclosed libel damages after falsely alleging fund management executives had dishonestly kept £1bn of their clients’ money.
The paper printed an apology this weekend to Pentagon Capital Management, its chief executive Lewis Chester, managing director Jafar Omid and founder David Chester, over claims made in a July 2008 story headlined: “David Cameron’s friend and £1bn he won’t give back.”
Libel lawyers Carter Ruck represented Express Newspapers, proprietor Richard Desmond, Sunday Express editor Martin Townsend and journalist David Parsley.
According to the Sunday Express apology, the original article “alleged that Lewis Chester and Jafar Omid, executives of Pentagon Capital Management, were intending to keep for themselves £1bn of their investors’ money, whilst dishonestly promising to return it to them”.
It also “alleged that investors had been dishonestly hoodwinked. It was suggested that Mr Chester and Mr Omid had refused to answer legitimate journalistic enquiries”.
The apology, printed on page 11, added: “The article also alleged that they, together with David Chester, the firm’s founder and former non-executive chairman, have a longstanding and cynical business practice of exploiting their small investors in order to make massive gains for themselves at their investors’ expense.”
Express Newspapers accepted there was no basis for these allegations and apologised “for the damage caused to the reputation of Pentagon by the article and the hurt and embarrassment caused to Lewis Chester, Jafar Omid, David Chester and their families”.
“There is no truth in the suggestion that Lewis Chester, David Chester or Mr Omid have prospered by exploiting small investors, to the contrary, Pentagon funds have performed well,” the paper added.
Solicitor David Price, acting on behalf of the three men and Pentagon, said no attempt had been made to put the allegations contained in the story to anyone at Pentagon before publication.
In a statement to be read in the high court, Price said Express proprietor Richard Desmond accepted that it was comments he made “in the presence of Sunday Express journalists”, that had prompted the paper to publish the article.
He said one of Desmond’s family members had “a very small continuing investment which Pentagon advised was not within their control and would have been unlawful to repay”.
Express Newspapers has undertaken not to repeat the allegations at the centre of the libel claim. The paper has also promised not to photograph Lewis Chester’s house or keep it under surveillance.