July 22 (Bloomberg) -- News Corp. Chairman Rupert Murdoch should strengthen corporate governance rules and tighten internal controls after a U.K. phone-hacking scandal, Saudi Prince Alwaleed bin Talal al Saud said in a CNN interview.
“All of this is in motion already,” Alwaleed, whose Kingdom Holding Co. owns about 7 percent of News Corp.’s voting shares, said in an interview yesterday on “Piers Morgan Tonight.” He said he wasn’t worried about the fallout from the hacking scandal at the now-defunct News of the World newspaper.
Alwaleed’s backing has helped Murdoch weather the controversy around investigations into phone-hacking and alleged police bribery at News Corp.’s U.K. unit. He is News Corp.’s second-largest holder of voting shares after the Murdoch family. The Saudi prince, 56, issued a statement of support for Murdoch and his son, James, on July 20, the day after they gave three hours of testimony in the U.K.’s Parliament.
“At the end of the day we have to let the investigation take its procedure and we have to see where this ends,” Alwaleed said. “Let’s not anticipate what the investigation might come up with.”
While he has consistently voiced confidence in Murdoch, who is also chief executive officer, Alwaleed also has urged New York-based News Corp. to cooperate with government inquiries. He called for the resignation of Rebekah Brooks, the former News of the World editor who was CEO of News Corp.’s News International unit, while Rupert and James Murdoch still backed her publicly. Brooks resigned a day after Alwaleed said in a BBC interview she should step down.
Alwaleed remains “both supportive and confident in the leadership of Rupert and James Murdoch,” he said in the July 20 statement.
The Murdochs answered “all questions” at the July 19 hearing with “full honesty and integrity,” said Alwaleed. He also said he supports the inquiry as “part of a necessary process to address the unacceptable practices that developed at the now closed News of the World.”
When asked last night whether his support for James Murdoch had weakened in light of claims by ex-News Corp. employees that some of his testimony was inaccurate, Alwaleed said he went public with his support for the Murdochs because “I know them very well.”
The Murdochs have shown high integrity and honesty, Alwaleed said, before adding that the investigation should take its course.
James Murdoch, 38, who is News Corp.’s deputy chief operating officer and chairman of the News International unit, said in a statement yesterday that he stood by his testimony.
Tom Crone, a former legal manager for News International, and Colin Myler, editor of the News of the World tabloid until this month, said Murdoch was “mistaken” in his testimony about information he received before authorizing a settlement to one of the victims of phone-hacking.
News Corp. is much bigger than its U.S., U.K. and Australian newspaper business, Alwaleed told Morgan, a former News of the World editor who has defended Murdoch and News Corp. in Twitter posts.
“For a company like that to function, clearly it doesn’t depend only on Rupert Murdoch or James Murdoch,” Alwaleed said. “I interact a lot with News Corp. and I see a lot of depth at the managerial levels.”
News Corp. gained 55 cents, or 3.5 percent, to $16.48 yesterday in Nasdaq Stock Market trading, its highest close in almost two weeks. The Class A shares have declined 8.7 percent since the Guardian newspaper reported on July 4 that News of the World accessed the voicemail of murdered teenager Milly Dowler.
--With assistance from Brett Pulley in New York. Editors: Anthony Palazzo, Young-Sam Cho
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