Inquiry into phone hacking by Britain's best-selling newspaper announced



LONDON // Prime minister David Cameron bowed to growing public outrage yesterday and agreed to a public inquiry into phone hacking by Britain's best-selling newspaper.

Mr Cameron also told parliament that a separate inquiry would be held into why an initial Scotland Yard investigation into the claims three years ago wrongly concluded that a solitary, rogue reporter on the News of the World and a private investigator had been solely responsible for the hacking.

In fact, it has now emerged that the practice was widespread at the newspaper, owned by Rupert Murdoch's News International, with journalists paying for access to the mobile phone voicemails of at least 100 people, mainly celebrities, and, possibly, many more.

Police also confirmed yesterday that they had been handed e-mails by the News of the World showing that senior Scotland Yard officers had been illegally paid tens of thousands of pounds in recent years to leak information.

The e-mails were said to implicate the then-editor, Andy Coulson, who went on to become Mr Cameron's director of communications before resigning over the hacking scandal in January.

The controversy has been rumbling on for more than four years, after Clive Goodman, the newspaper's royal correspondent, and private detective Glenn Mulcaire were jailed for hacking into the voicemails of staff members of the royal family. But on Tuesday, new revelations sparked a public outcry.

It was then that The Guardian newspaper revealed that not only had the phones of the rich and famous been hacked, but also that of Milly Dowler, a 13-year-old who disappeared on her way home from school on the outskirts of London in 2002 and whose body was not found for six months.

It was reported yesterday that the tabloid had also targeted the phones of the families of Holly Wells and Jessica Chapman - two 10-year-olds who were abducted in Cambridgeshire in 2002 and whose bodies were found two weeks later. Relatives of some of the 52 people killed by suicide bombers in the 7/7 attacks on the London transport system in 2005 had also been subject to hacking.

Mr Cameron told MPs yesterday that the latest revelations were "absolutely disgusting" and that the inquiries would start as soon as the latest police probe into the hacking scandal was completed.

"We are no longer talking here about politicians and celebrities. We are talking about murder victims, potentially terrorist victims, having their phones hacked into," the prime minister said.

"It is absolutely disgusting, what has taken place, and I think everyone in this House and, indeed, this country will be revolted by what they have heard and what they have seen on their television screens."

Ed Miliband, leader of the opposition Labour Party, also demanded that Mr Cameron refer the proposed takeover of the UK's biggest satellite TV provider, BSkyB, by Mr Murdoch to the Competition Commission to test if he were a "fit and proper" person to run the broadcaster.

Mr Cameron would make no such undertaking despite loudening voices expressing concern that the hacking scandal cast doubts on Mr Murdoch's News Corp's bid to buy the 61 per cent of BSkyB that it does not already own.

The prime minister also said that an independent inquiry into the scandal should look not just at practices at the News of the World but also "a wider look into media practices and ethics in this country".

Even The Times, a newspaper in the same News International stable as the News of the World, accepted in a leader article yesterday that the latest phone hacking revelations had "besmirched the name of journalism".

After months during which the paper appeared relatively mute over the scandal, it carried a front-page story yesterday and devoted two inside pages to it.

"Anyone who believes in the nobility of the trade of reporting the truth … and anyone who believes in the contribution of vibrant comment to a raucous and well-informed democracy, has to be clear when a line has been crossed," it commented.

But the cracks now appearing in the relative unity that News International has maintained so far could be nothing compared to the commercial damage the company's various titles might suffer.

Three of the News of the World's biggest advertisers - Ford, Virgin Holidays and the Halifax bank - have all now cancelled contracts until the completion of the latest police inquiry.

Should the government eventually relent and either block or stall the News Corp takeover of BSkyB, the financial implications for Mr Murdoch's media empire in the UK could be dire.

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Enric Sala is an expert on marine conservation and is currently the National Geographic Society's Explorer-in-Residence. His love of the sea started with his childhood in Spain, inspired by the example of the legendary diver Jacques Cousteau. He has been a university professor of Oceanography in the US, as well as working at the Spanish National Council for Scientific Research and is a member of the World Economic Forum’s Global Future Council on Biodiversity and the Bio-Economy. He has dedicated his life to protecting life in the oceans. Enric describes himself as a flexitarian who only eats meat occasionally.

What is biodiversity?

According to the United Nations Environment Programme, all life on earth – including in its forests and oceans – forms a “rich tapestry of interconnecting and interdependent forces”. Biodiversity on earth today is the product of four billion years of evolution and consists of many millions of distinct biological species. The term ‘biodiversity’ is relatively new, popularised since the 1980s and coinciding with an understanding of the growing threats to the natural world including habitat loss, pollution and climate change. The loss of biodiversity itself is dangerous because it contributes to clean, consistent water flows, food security, protection from floods and storms and a stable climate. The natural world can be an ally in combating global climate change but to do so it must be protected. Nations are working to achieve this, including setting targets to be reached by 2020 for the protection of the natural state of 17 per cent of the land and 10 per cent of the oceans. However, these are well short of what is needed, according to experts, with half the land needed to be in a natural state to help avert disaster.

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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.”

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