Bloomberg News

News Corp.'s BSkyB Stake Still Under Scrutiny, Ofcom Says

April 03, 2012

News Corp. still faces regulatory scrutiny over its 39 percent stake in British Sky Broadcasting Group Plc (BSY) amid a U.K. phone-hacking scandal, even after James Murdoch stepped down as chairman of the pay-TV company.

With Murdoch, News Corp.’s deputy chief operating officer, remaining a board member of BSkyB, media watchdog Ofcom will continue to investigate his role, alongside that of the biggest shareholder.

“We continue to gather evidence which may assist us in assessing whether BSkyB is and remains fit and proper to continue to hold its broadcast licences,” Ofcom said today in an e-mailed response to questions. “The licensee, as a corporate body, will include controlling directors and shareholders.”

Ofcom, which has the ability to revoke a broadcaster’s license, set up a special team to scrutinize News Corp. (NWSA:US) after reporters of its U.K. publishing unit hacked into sources’ phones and bribed police for stories. James Murdoch, son of News Corp. Chief Executive Officer Rupert Murdoch, previously oversaw News Corp.’s U.K. publishing unit News International.

Senior independent director Nicholas Ferguson will replace Murdoch as BSkyB chairman, the pay-TV broadcaster said today. Murdoch will remain a non-executive director of BSkyB.

The phone-hacking scandal prompted News Corp. to drop a 7.8 billion-pound ($12.5 billion) bid to buy all of BSkyB last year and close the News of the World tabloid.

To contact the reporter on this story: Jonathan Browning in London at

To contact the editor responsible for this story: Kenneth Wong at

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