Company in news-fixing row goes into administration

A London-based media company at the centre of a global news fixing row that has engulfed the BBC and CNBC has gone into administration after it was revealed in The Independent that it made programmes for the BBC about Malaysia while taking £17m from the Malaysian government to promote its image.

FBC Media (UK) and its parent company FBC Group, which operated from offices in the City of London, called in the administrators on Monday, days before the BBC Trust is due to consider a report prepared by the BBC executive on a series of programmes which the production company made for broadcast on the corporation’s international news and current affairs channel BBC World News.

The company is also under investigation by the American-owned broadcaster CNBC, for which it produced a flagship weekly show called World Business. The programme has been dropped and CNBC, which is part of the NBC network, has suspended all programming from FBC, which continues to maintain a presence in Italy and India. The subject is also being examined by the broadcast regulator Ofcom, which is considering a formal investigation.

The Independent revealed in August that since 2009 FBC has made at least four programmes for the BBC about Malaysia after being allocated millions of pounds by the Kuala Lumpur government to conduct a “Global Strategic Communications Campaign”. FBC, which did PR work as well as making television content, also hired the American lobbying company APCO for the purpose of “raising awareness of the importance of policies in Malaysia that are pro-business and pro-investment”. The story has caused a political row in Malaysia which threatens to cause lasting damage to the BBC’s reputation for impartiality.

In a further revelation last month, FBC was shown to have promised its client Microsoft “guaranteed” coverage on the show that it made for CNBC.

When asked by The Independent about the allegations FBC denied any impropriety and said, via its lawyers, that “at no time have the television programmes made for the BBC ever been influenced or affected by our client’s commercial activities.” FBC’s lawyers said the company ran production and commercial divisions which “are and always have been quite separate and distinct”.

This week at the FBC offices on the first-floor of a shared business complex, near London’s Gray’s Inn Road, the carpets had been taken up and the phones were not being answered. World maps remained on the walls, along with clocks showing the time in various capital cities and a notice board covered in press clippings. Three men who were present in the office declined to open the reception door.

The company’s affairs are in the hands of Buckinghamshire-based administrators Hillier Hopkins Corporate Recovery. The administrator, David Butler, said he was appointed on Monday. “At the end of the day if there is money available for creditors that will be paid out by way of dividend,” he said.

In a statement, Hillier Hopkins said: “The administrator is now working on establishing the extent of the companies’ assets in order to maximise any potential return to the ex-employees and other creditors. As with any corporate insolvency, the circumstances surrounding and the reasons for the companies’ failure will be fully investigated in due course.”

FBC, which was incorporated in 1998, was a vehicle for a group of high-profile figures led by founder and chairman Alan Friedman, an American former award-winning reporter for the Financial Times and the International Herald Tribune. Alongside him was the prominent television journalist John Defterios, who was group president of the company for more than a decade and is currently the host of CNN’s prestigious show Marketplace Middle East. Defterios, who was co-author of the 2004 FBC letter to Microsoft communications chiefs promising “guaranteed” coverage, conducted a CNN interview with the Malaysian Prime Minister Najib Razak during his visit to London in July. CNN has said it is happy with the interview and that it has not commissioned programming from FBC. According to documents at Companies House, Defterios resigned from FBC on 5 August, shortly after The Independent first asked questions about the company.

FBC built a network of blue chip clients that included the governments of Greece, Italy and Zambia. It had contracts to promote tourism in Malaysia, Indonesia and Hungary. It boasted: “Our clients include heads of state, governments and ministries, special economic zones and property projects, companies and international organisations.”

As its ambitions grew in London it expanded its portfolio in July 2004, buying the award-winning British independent company, Diverse Productions, known for ground-breaking factual programmes such as Channel 4’s Operatunity and BBC2’s Killing Hitler. The price of around £7-8m was considered generous by some close to the deal. Diverse was sold to Zodiak Entertainment two years later.

Friedman, who lives in Italy, has become a familiar figure at the World Economic Forum in Davos where he made editions of World Business and this year produced a blog for the influential American magazine The Atlantic. The magazine’s publisher Justin Smith resigned from the FBC board in August at the outbreak of the controversy.

Carter-Ruck, the law firm which has previously represented FBC, did not return calls last night.