Express Newspapers, which Desmond bought last November, complained to the Advertising Standards Authority about a mailing that its mid-market rival, published by Associated Newspapers, sent to Express readers and newsagents.
A mailing contained a mock front and back page wrapped around a complimentary copy of the Daily Mail. The paper claimed to be "a cleaner, brighter daily read". Inside, it stated, "The Daily and Sunday Express have recently been acquired by an individual whose routes [sic] in publishing are firmly linked to soft pornography".
It went on to question whether he was a suitable publisher of a "family newspaper".
The letter then went on to say that the Daily Express "is running down its North-West operation and sacking almost all of its staff". The mailing added that there has been "large-scale redundancies, with the whole Express Digital Media department losing their jobs".
The ASA upheld one of Desmond's complaints that claims of sleaze and sackings in the advertisements were denigratory.
The watchdog told Associated Newspapers that any future similar ads would have to be vetted by the watchdog.
The Authority considered that, although claims of a link between the Express's proprietor and soft pornography and the closure of websites might be truthful, those links did not justify the implication that the content of the Daily Express was sleazy.
The Authority concluded that the advertiser's denigratory approach went beyond mere objective comparison and was unacceptable. It advised the advertisers to consult the Committee of Advertising Practice copy advice team before using a similar approach in future.