Defiant Murdoch faces shareholders and new allegation

US, British and Australian pension funds are keeping up the pressure for the removal of Rupert Murdoch and his sons from the 15 member board of the $32 billion media conglomerate News Corporation.

A motion calling for the tycoon to be stripped of his Chairmanship of News Corp, which he currently holds in conjunction with the Chief Executive’s role, is also due to be debated.

But an unapologetic Rupert Murdoch, appearing before his shareholders for the first time since several of his senior executives were arrested in connection with the phone-hacking scandal, insisted News Corp’s history was the “stuff of legend.”

He said he was “personally determined” to clean up the phone hacking scandal that had led to the closure of the News of the World, but he added the issue needed to be set in context at a company that had been under “understandable scrutiny and unfair attack”.

New allegations

Tom Watson MP, who was instrumental in probing the Murdochs at a parliamentary inquiry into phone hacking in July, pushed Murdoch as part of his role to represent of 1,669 nonvoting stock holders.

The politician asked the media mogul if he was aware that a person who had left prison was hired by News Corporation and hacked the computer of a former army intelligence officer.

Murdoch said he wasn’t aware, and board director Viet Dinh said the company would look into the allegation.

The 80-year-old company chairman said: “I promise you absolutely that we will stop at nothing to get to the bottom of this and put it right.”
Watson said: “News Corp is potentially facing a Mulcaire II.”

He added: “You haven’t told any of your investors about what is to come.”

‘Not standing up to Murdoch’

Robert McCormick, chief policy officer at the institutional investor Glass Lewis & Co, told Channel 4 News the board need to be changed so they can stand up to decisions made by Rupert Murdoch and his sons.

“Well if you look at the structure of the board, there’s very little independent representation of the non-affiliated shareholders if you will,

“If you look at the 15 board members, 6 are insiders, they are employees reporting to Rupert Murdoch,” Mr McCormick said

“So it’s not really a group that is inclined to stand up to Rupert Murdoch on behalf of independent shareholders,” he continued.

But because Murdoch has 40 percent control of News Corp’s voting shares and is supported by the next largest holder, Saudi Prince Alwaleed bin Talal, it is unlikely that Murdoch, his sons James and Lachlan or any other long-time serving director could get voted off the board.

However if the board receives a much lower share of the vote than it would normally expect it could force some sort of board shake-up in coming months, although details of the vote might not become clear until early next week.

Outside the venue, the Occupy Wall Street movement are staging a protest against the corporation.

‘Damage limitation’

By holding the AGM in Los Angeles, some 2,400 miles west of their New York HQ, they ensured that the most critical proceedings would occur after early editions of tomorrow morning’s British papers had gone to print.

In another instance of what some people have called damage limitation, Rupert Murdoch confirmed that the family of murder victim Milly Dowler will receive a £2m settlement over the hacking of her phone’s voicemail by the News of the World after she disappeared in 2002.

Murdoch said he would also give £1m to charities chosen by the Dowlers, to underscore his regret at the “abhorrent” behaviour.

The Dowler family said the £1m donation was “a fitting tribute” to Milly.