The Australian wrongly reported that the chairman of Australia’s Ten Network television station sold 88% of his shares in the company earlier this year. The story implied that the chairman, David Gordon, sold his shares to make money before stockholders could, which looks bad since the company is financially suffering. But, the fact remains, Gordon hadn’t sold any shares, ABC’s Media Watch reported.
The story has since been unpublished but Australian media site Mumbrella posted an image of the print edition, which shows the story claimed, “Ten Network chairman David Gordon sold almost all his shares in the network before the company was placed into voluntary administration and had no back-up plan should the advertising market fail to recover.”
Ten Network went into voluntary administration, which is similar to the U.S. bankruptcy process, last month. The network said earlier this year it had lost more than $200 million.
The story also suggested Gordon was acting in his own interest and not the interest of shareholders and investors, and that his board took actions that failed to protect the company and shareholders.
Mumbrella called the story fail “one of the biggest factual blunders since Paul Whittaker became the newspaper’s editor-in-chief 18 months ago.” iMediaEthics has written to The Australian to ask how it got the story wrong. We’ve also contacted Gordon’s lawyer to ask if legal action is ongoing or if he is satisfied with the retraction.
After publication of what turned out to be erroneous claims, Gordon’s attorney, Leon Zwier, complained to The Australian seeking a retraction and apology, according to the Australian Financial Review.
While Gordon’s number of shares did decrease, it wasn’t because he sold them, The Australian‘s correction explained. Shares in the company had been restructured for investors holding shares. “The reduction in the number of shares held was due to a 10:1 share consolidation applying to all shareholders, which took effect on January 25 last year,” the correction stated.
The Australian‘s editor John Lehmann told ABC Media Watch, “We take our responsibilities to our readers to present accurate information very seriously. On this occasion, we did not deliver the thoroughness we expect of ourselves and we have acknowledged this publicly. We have issued a sincere public apology to David Gordon and the Ten Board and reviewed our processes to ensure we maintain our standards.”
The Australian published the following apology:
“An article in The Australian on Monday (‘Ten chairman sold down stake’, page 23) incorrectly stated that Network Ten chairman David Gordon sold 88 per cent of his shareholding in the company before it went into voluntary administration. The Australian acknowledges that Mr Gordon did not sell any shares in the company and in fact his shareholding increased in the period before the company was placed into administration. The reduction in the number of shares held was due to a 10:1 share consolidation applying to all shareholders, which took effect on January 25 last year. The Australian acknowledges that its statement was inaccurate and untrue and apologises to Mr Gordon. The article also stated that Mr Gordon and the Network Ten board failed to conduct scenario modelling on cashflow analysis and were caught unprepared when the three main shareholders decided not to back a financial restructuring of the broadcaster. The Australian also acknowledges that both of these statements were inaccurate and untrue and apologises to Mr Gordon and the board.”