Rebekah Brooks 'received £10.9m pay-off' as cost of hacking spirals
REBEKAH Brooks is understood to have received a £10.9m payoff from News International after the media group admitted it handed the sum to "one director as compensation for loss of office".
The payout was revealed in the accounts of NI Group and four of its subsidiaries, which also counted the mounting cost of the closure of the News of the World.
News Group Newspapers, which published the News of the World and still produces The Sun, took a write-down of £289m for costs related to the hacking scandal, including £160m for the loss of the Sunday tabloid.
The News of the World was shut down last year following claims that its journalists hacked phones and paid police bribes on Ms Brooks’ watch. She had been chief executive of NI.
Meanwhile NI Group, its parent company, swung from a £111.5m pre-tax profit in 2011 to a £155.5m loss in the year to July 2012, after a series of significant write-downs related to the hacking and bribery scandals, which have shaken Rupert Murdoch’s entire News Corporation media empire.
The British newspaper operation took a £51.6m hit for “restructuring expenses” associated with the News of the World, and another of £140.9m for “legal and professional fees” related to the phone hacking claims during the period.
Sales also fell, dropping12.8pc to £1.19bn.
The scandal is still taking a substantial toll on News International’s bank balance this year, the company revealed.
Its internal Management and Standards swat team, assembled to investigate the issue, has notched up a further £23m of legal and professional costs in the current financial year, and the company has also had to pay a further £11.3m for the News of the World closure.
“The outlook will continues to be impacted by the closure of the News of the World [and there is] a high level of uncertainty in respect of potential damages and legal costs which may be payable,” News Group Newspapers said.
“The company is co-operating with these investigations, but is not able to estimate the ultimate outcome or costs associated with these investigations…Violations of law may result in civil, administrative or criminal fines or penalties, which may or may not be significant.”
News Corporation faces lawsuits on both sides of the Atlantic, and is being investigated by America’s Department of Justice and Federal Bureau of Investigation for breaches of its Foreign and Corrupt Practices Act which outlaws bribery to overseas officials.
The accounts also revealed the declining performance of The Times and Sunday Times newspapers, held by Times Newspapers Limited. Turnover fell 10pc to £361m, whilst pre-tax losses widened considerably from £11.9m in 2011 to £28.8m last year.
The division notched up £12.7m of redundancy costs during the 12-month period