Bloomberg News

James Murdoch Board Seats Dwindle Amid BSkyB Scrutiny

March 24, 2012

News Corp. (NWSA)’s James Murdoch resigned as director from three additional boards as he’s cutting his ties to the company’s U.K. newspaper division amid a phone- hacking scandal.

Murdoch stepped down on March 21 from the board of Times Newspapers Holdings, a body created by his father Rupert to guarantee the Times’ editorial independence after he bought the newspaper in 1981, according to a filing to the U.K.’s Companies House. He also resigned as director of Newscorp Investments and News International Publishers Limited, two units of News Corp.’s U.K. division.

Murdoch has given up several influential positions as lawmakers prepare a report about his role in a phone-hacking scandal that rocked News Corp. and led to the closure of the News of the World tabloid last year. Auction house Sotheby’s (BID) said March 16 that Murdoch will leave its board. He resigned from the board of GlaxoSmithKline Plc (GSK) in January and stepped down as executive chairman of News Corp.’s U.K. unit News International, which publishes the Times newspaper, last month.

News Corp., based in New York, has said that Murdoch, 39, will focus on his main job as deputy chief operating officer to oversee the company’s international television operations. Still, Murdoch also faces calls from investors to step down from the board of News Corp. and as chairman of pay-TV company British Sky Broadcasting Group Plc. (BSY)

Miranda Higham, a London-based News Corp. spokeswoman, declined to comment today. The Telegraph reported Murdoch’s resignation from the three U.K. boards earlier.

Crucial Report

Murdoch’s future at BSkyB hinges on a report that U.K. lawmakers are preparing on the phone-hacking scandal following testimony he gave that has been contradicted by former subordinates. The committee began its inquiry in July after Murdoch said lawmakers had been misled about the extent of phone hacking during a previous probe in 2009. It has questioned him twice for the new report, once alongside his father Rupert, News Corp.’s 81-year-old chief executive officer.

The U.K. lawmakers are behind schedule with their report, as they debate how critical they can be ofMurdoch, two people with knowledge of the panel’s discussions said in February. There is no question of Murdoch escaping criticism completely, the people said at the time. They said panel members are unimpressed by his statements that he was ignorant about what was going on at the News International unit.

Digging Deeper

On March 14, Murdoch told U.K. lawmakers he should have dug deeper to uncover the phone hacking at the company’s U.K. unit, which saw News Corp. journalists hack into the phones of celebrities and a murdered schoolgirl.

“I could have asked more questions, requested more documents and taken a more challenging and skeptical view of what I was told,” Murdoch said.

Murdoch told lawmakers in November that News of the World editor Colin Myler failed to tell him in 2008 that phone hacking at the now-defunct tabloid was common. Myler and the newspaper’s lawyer Tom Crone have repeatedly insisted that they discussed evidence with Murdoch.

The phone-hacking scandal prompted News Corp. to close the News of the World in July and drop its 7.8 billion-pound ($12.4 billion) bid for full control of BSkyB, the U.K.’s biggest pay- TV company.

U.K. media regulator Ofcom will take parliament’s report into consideration when evaluating whether James is “fit and proper” to hold a broadcast license on behalf of BSkyB.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net; Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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