Telegraph acquisition may 'operate against the public interest', Ofcom says, as investigation enters phase 2

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Regulatory approval may be a moot point as the government last week announced plans to ban foreign governments from owning British newspapers - effectively blocking the deal.

The takeover of the Telegraph has been referred for further regulatory scrutiny as the communications watchdog said the purchase, by an Abu Dhabi-backed investment fund, may 'operate against the public interest'.

The potential owner 'may have the incentive to influence in a way that could potentially act against the public interest in the UK by influencing the accurate presentation of news and free expression of opinion', Ms Frazer said. Whether the regulators approve the acquisition or not is likely irrelevant as new legislation looks set to block it.

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