Investor Storm Builds Around Murdoch
A day of testimony about the telephone hacking scandal by James Murdoch and two days by his father, Rupert Murdoch, in which they acknowledged that they allowed subordinates to dupe them about the extent of the matter have riled News Corp shareholders. Britain's Guardian newspaper reported today (Friday) that they are particularly concerned about how their remarks will be viewed by the British regulator OFCOM, which has launched a probe into whether the leadership of the company meets its criteria of "fit and proper" owners of BSkyB, the British satellite company that is controlled by News Corp. "The big question is what does this [testimony] mean for BSkyB?" asked Washington-based analyst Michael Pryce-Jones of Change to Win, which in February called for James Murdoch to resign from the board of News Corp, describing his handling of the scandal "incompetent." An unnamed spokesman for research group PIRC, which advises pension funds on their investments, also said that News Corp shareholders should be concerned about how OFCOM reacts to the testimony. He told The Guardian that OFCOM's own reputation is on the line if it doesn't take some action, "Otherwise, critics will ask, how badly does a company have to behave in order to fall foul of the regulator?"