Senate finds evidence Keating made 'balance' offer to Black

SYDNEY (AFX) - An Australian Senate inquiry has found that there is evidence to support claims that Paul Keating, the Prime Minister, offered to let the Canadian investor Conrad Black increase his stake in John Fairfax Holdings in return for balanced coverage by Fairfax newspapers.

The Senate committee report said Mr Keating, who refused to appear before the inquiry, held out to Mr Black 'the prospect of increased investment in Fairfax in return for balanced coverage'.

The report added that Mr Keating 'did not take into account national interest considerations' when his cabinet decided on 20 April 1993 - shortly after his 13 March election victory - to allow Mr Black's Telegraph group to lift its investment.

The report was produced by four conservative coalition opposition members and one minor- party member of the nine-seat Senate committee inquiry.

Four governing Labor Party members of the committee wrote a dissenting report.

The Senate inquiry was set up by the opposition after disclosures that Mr Keating told Mr Black the government might allow him to expand his stake in the Fairfax newspaper group if its coverage of the federal elections was 'balanced'.

The Fairfax group includes three of Australia's most influential newspapers, the Sydney Morning Herald, the Age of Melbourne and the Australian Financial Review.

Mr Keating said last November that he had told Mr Black he would consider changing foreign ownership rules to allow Mr Black to increase his stake in Fairfax to 25 per cent from 15 per cent.

He said he had told Mr Black: 'Well, we will think about it but we want a commitment from you that the papers will be balanced.

'If there is any notion that, you know, of bias, that is that you barrack for the coalition, on the basis of your conservative proclivities in other places, there is no way you would qualify as the kind of owner we would like,' Mr Keating said.