Already a Bloomberg.com user?
Sign in with the same account.
(Updates with closing stock price.)
Sept. 30 (Bloomberg) -- James Murdoch and his brother Lachlan, sons of billionaire Rupert Murdoch, should be replaced on the News Corp. board to improve accountability at the company, an Australian pension fund group said.
The brothers and four other board members shouldn’t be re- elected because the company needs “credible skilled outside directors,” the Australian Council of Superannuation Investors, whose members manage more than A$250 billion ($244 billion) in pension assets, said on its website.
The council also wants a “genuinely independent” chairman, rather than Rupert Murdoch in that role and chief executive officer. News Corp. has been embroiled in a scandal since July over revelations its News of the World newspaper hacked a murdered girl’s voicemail. That led to the closing of the U.K. tabloid, executive resignations and the scrapping of a bid for full control of British Sky Broadcasting Group Plc.
“Responsibility for this, as well as setting the ethical tone throughout News Corp. and affiliated organizations, rests with the News Corp. board,” Council CEO Ann Byrne said in the statement. “The whole board is responsible for failures of oversight, however we regard it as impractical to recommend against the election of the whole board.”
Given the Murdoch family’s control of about 40 percent of News Corp. voting stock, there is “no prospect” of ousting any incumbent director, the council said in its statement.
In order to press for skilled independent directors and to raise oversight, “a clear message needs to be conveyed to the board,” the council said.
The members represent 57 percent of the Australian not-for- profit superannuation sector, according to its website. They include Hesta, a A$17 billion fund serving 700,000 people in health and community services. The council didn’t say how much News Corp. stock members own.
The call for Murdoch to step down as chairman was echoed today by Christian Brothers Investment Services Inc., which urged investors to oppose the re-election of the entire board.
“Through their votes, investors can signal their support for the appointment of an independent chair, who can help to rebuild the public trust,” Julie Tanner, assistant director of socially responsible investing at New York-based Christian Brothers, said today in an e-mailed statement. “An independent chair will also help reassure shareholders that News Corp. is committed to getting to the bottom of the recent hacking scandal.”
News Corp. fell 45 cents to $15.48 at 4 p.m. New York time in Nasdaq Stock Market trading. The Class A shares have gained 6.4 percent this year. The company has repurchased $1.31 billion of stock since mid-August, according to regulatory filings.
Christian Brothers filed a petition with News Corp. on July 15 that seeks to permanently split the CEO and chairman positions, Tanner said on July 20. The fund said then it held 30,755 Class B voting shares of News Corp.
News Corp. agreed to pay 3 million pounds ($4.7 million) to settle claims that the News of the World hacked the mobile phone of the murdered girl, Milly Dowler, a person with knowledge of the matter said this month.
The New York-based company faces a U.K. parliamentary probe of phone hacking by its employees, and is also the subject of criminal investigations in the U.S.
James Murdoch, 38, and Rupert Murdoch, 80, testified in July before a U.K. parliamentary committee to explain how much they knew about the hacking at News of the World.
Since then, additional allegations have surfaced, including claims this week that reporters hacked the voice mails of Jane Goody, a reality TV star who died of cancer. The allegations were made by Goody’s former publicist, Max Clifford.
James Murdoch, News Corp.’s deputy chief operating officer, has said repeatedly that he didn’t know of widespread hacking. His testimony has been challenged by former News Corp. employees and he has been asked to appear for a second time before the U.K. Parliament’s Culture Committee.
Teri Everett , a New York-based company spokeswoman, didn’t respond to a requests for comment.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.
The Australian pension-fund council also recommends opposing Andrew Knight, Arthur Siskind and David DeVoe, who have all been on the News Corp. board for at least 20 years.
The sixth director whose re-election is opposed by the council is Natalie Bancroft, who has been on the board since her family agreed to sell Dow Jones & Co. to News Corp. in 2007.
News Corp. has already said directors Tom Perkins and Ken Cowley won’t be seeking re-election.
--With assistance from Rob Golum and Andy Fixmer in Los Angeles. Editors: Terje Langeland, Michael Tighe
To contact the reporter on this story: Robert Fenner in Melbourne at email@example.com
To contact the editor responsible for this story: Vipin Nair at firstname.lastname@example.org