(Updates with analyst comment in fourth paragraph.)
Nov. 9 (Bloomberg) -- Rupert Murdoch’s News Corp. replaced the head of its Australian unit a day after the start of a government inquiry into the nation’s print media that will scrutinize the company’s domination of the newspaper industry.
Kim Williams will become chief executive officer of News Ltd. on Dec. 5, replacing 41-year company veteran John Hartigan, News said in an e-mailed statement today. Williams has run the company’s Foxtel pay television venture for almost 10 years. Murdoch will become chairman of the Australian unit.
The inquiry into Australia’s media, where News controls more than half of the nation’s newspaper readership, began yesterday amid government claims Murdoch titles such as the Daily Telegraph are campaigning for “regime change.” Hartigan’s departure comes as Murdoch visits Australia, where he founded a media empire that now includes Fox television, the Times of London and the Wall Street Journal.
“The timing does look curious with the media inquiry going on, but it’s clear they wanted to sort this out while Rupert was in the country,” said Mark McDonnell, an analyst at stockbroking firm BBY Ltd. in Sydney who has an “underperform” rating on the shares. “Kim Williams is very polished and customer-focused and comes with none of the tensions with the government.”
Greg Baxter, a Sydney-based spokesman for News Ltd., didn’t immediately respond to a voicemail message on his office phone and email sent outside of normal business hours.
The departure of Hartigan comes less than four months after Murdoch lost the head of his U.K. publishing unit when Rebekah Brooks resigned in the wake of a U.K. phone-hacking scandal.
Richard Freudenstein will replace Williams, 59, at Foxtel, Australia’s biggest pay-TV business, which is 25-percent owned by News.
Communications Minister Stephen Conroy said in July that the Daily Telegraph, the best-selling newspaper in Australia’s largest city of Sydney, is “running a campaign on regime change.”
Hartigan said in July that there hasn’t been any evidence of wrongdoing by News’s Australian newspapers and the company doesn’t have a campaign against Prime Minister Julia Gillard.
“There are a number of people within the government who we appear to have a poor relationship with,” Williams told Sky News after today’s announcement. “I make no apology for the work of the News Corporation in examining and scrutinizing the work of governments and oppositions.”
Williams will be “responsible for building a strong leadership position for News Ltd. in digital media in Australia, significantly expanding the audience for our journalism,” Murdoch said in the statement.
Bloomberg News parent Bloomberg LP competes with News Corp. in providing financial news and information.
Murdoch’s Australian unit owns 120 metropolitan, regional and rural newspapers as well as the Foxtel stake. The billionaire got his start in Australia when he began running a daily in Adelaide in 1953 following his father’s death.
Murdoch shut down the U.K.’s 168-year-old News of the World, owned by News Corp. since 1969, following allegations it hacked into the mobile phone of a 13-year-old murder victim and he has since pulled his $12.5 billion bid to gain full control of British Sky Broadcasting Group Plc.
James Murdoch, Rupert’s son and News Corp.’s deputy chief operating officer, will tomorrow face U.K. lawmakers on why he didn’t act more quickly to stop unlawful behavior at the company’s newspapers.
Shareholders at last month’s annual general meeting called for governance changes at News Corp. and an end to voting practices that cement the family’s control. James received the highest percentage of votes against his election to the company’s board, at 35 percent.
--With assistance from Jacob Greber in Sydney. Editors: Edward Johnson, Malcolm Scott
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