Britain's "News of the World" admits hacking phones of royals, celebs



Britain's most powerful media group is facing a multi-million pound payout to celebrities, politicians and other public figures after admitting years of hacking into their private phones.

Amid fresh claims yesterday that the phone of a member of the royal family had been hacked, the News of the World - the UK's largest selling Sunday newspaper - offered an "unreserved apology" after admitting on Friday that its reporters had paid private investigators to tap into mobile phone voicemails.

The newspaper's owner, News International, which is run by Rupert Murdoch's son James, is understood to have set aside a £20 million (Dh120.3m) fund to pay compensation to those who have been targeted.

So far, News International has identified eight individuals, including actress Sienna Miller, former Culture Secretary Tessa Jowell and a female aide to former Deputy Prime Minister John Prescott, as being among the victims but The Sunday Telegraph yesterday estimated that the final tally of victims could be as high as 100.

The scandal, however, is likely to grow to embrace other British tabloids. While the leading non-tabloid newspapers have used phone taps only in investigations involving crimes or wrongdoing by public figures, journalists have privately known for years that the tabloid press routinely used phone and computer hacking to try to get scoops on celebrities.

It was, however, only in 2007 that the public became aware of the tactics when News of the World royal reporter Clive Goodman and private investigator Glenn Mulcaire were jailed after admitting hacking into the voicemails of Buckingham Palace staff members.

Editor Andy Coulson resigned after the convictions but denied he knew anything about the practice. A few months later, he was appointed press secretary to now-Prime Minister David Cameron. But he resigned earlier this year when the scandal would not go away.

From the start, News International executives have denied any widespread hacking was going on, including when they gave evidence to a parliamentary investigating committee.

Two previous Scotland Yard investigations have also concluded there was little evidence to justify the hacking allegations.

However, a third police inquiry is underway following claims that the first two were little more than a whitewash because of the closeness of officers to the journalists involved.

News International has also now had to admit the practice was widespread and, in its page-two apology yesterday, the newspaper said it "should not have happened" and that the practice "was and remains unacceptable".

The long-running controversy has been a source of considerable embarrassment to News International at a time when its parent company, Rupert Murdoch's News Corporation, is seeking government approval to take full control of BSkyB, the UK's largest satellite TV provider.

What appears to have triggered the sudden admission of guilt and the apology was the arrest last week of the News of the World's chief reporter Neville Thurlbeck and the paper's former news editor Ian Edmondson on suspicion of having unlawfully intercepted voicemail messages.

The apology, however, appears to have failed to placate the victims with Ms Miller vowing yesterday to do everything possible to hold to account those responsible for the "outrageous violations of her privacy".

Mark Thomson, her lawyer, released a statement on her behalf, which said: "Sienna's claims are based on outrageous violations of her privacy; her voicemails were persistently hacked and the information obtained was used to publish numerous intrusive articles over a period of a year.

"She is awaiting information and disclosure from the News of the World which has been ordered by the court and will consider her next steps once this is provided.

"Her primary concern is to discover the whole truth and for all those responsible to be held to account."

Ms Miller's court action is only one of several in the pipeline and many more are expected, not least after The Independent on Sunday yesterday claimed that Princess Eugenie, the daughter of the Prince Andrew and Sarah Ferguson, had been among the victims.

Questioned on BBC television yesterday about the scandal, Danny Alexander, the chief secretary to the treasury in the coalition government, described it as "very serious" and said that the latest police investigation and impending court cases "must go forward".

He added: "It's outrageous that people have had their voicemails hacked into - seemingly a large number of people. That's not something that could be acceptable in any set of circumstances."

Labour leader Ed Miliband demanded to know who knew about the "criminal behaviour" and when.

He told reporters: "What we have seen is a serious admission of wrongdoing by News International.

"We have now got to get to the bottom of any criminal behaviour, which is a matter for the police and should be thoroughly investigated.

"We need to know who knew about these actions and when. We also need to know how far across the organisation knowledge of these actions went."

dsapsted@thenational.ae

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”