Monday 18 December 2017

News Corp backs Rupert Murdoch after damning indictment by British MPs

Rupert Murdoch. Photo: Getty Images
Rupert Murdoch. Photo: Getty Images

Rosa Silverman, Jamie Grierson and James Tapsfield

NEWS Corporation's board has declared its full confidence in Rupert Murdoch's "fitness", insisting he should remain at the helm of the company.

Directors convened a meeting to consider their response to a report by a committee of MPs that found the media mogul was "not a fit person" to run an international company.

In a contentious amendment to the report by the Commons Culture Committee investigating the News of the World phone-hacking scandal, News Corp was censured for its "lack of effective corporate governance".

But after discussing the findings mainly by telephone, the company's board rejected the MPs' conclusion about Mr Murdoch.

They said in a statement: "The board of directors of News Corporation met and announced its full confidence in Rupert Murdoch's fitness and support for his continuing to lead News Corporation into the future as its chairman and CEO.

"The board based its vote of confidence on Rupert Murdoch's vision and leadership in building News Corporation, his ongoing performance as chairman and CEO, and his demonstrated resolve to address the mistakes of the company identified in the select committee's report."

Their backing of the News Corp boss follows rumblings of discontent from some US shareholders keen to see the company distance itself further from the UK phone hacking scandal.

Christian Brothers Investment Services (CBIS), which has a voting stake in News Corp, heaped criticism on the company and the board's support for its chief executive, saying "shareholders have endured enough".

Julie Tanner, assistant director of socially responsible investing at CBIS, said: "Considering the lack of independence of the News Corp board, it is not surprising that they would support the status quo.

"News Corp now exemplifies the risks associated with poor corporate governance. The House of Commons Select Committee findings demonstrate the far-reaching impact of News Corp's corporate governance failures."

CBIS has previously filed a resolution asking the board to replace Mr Murdoch with an independent chairman.

The MPs' report was in line with this demand, Ms Tanner said, adding: "These scandals will have a long-lasting impact on News Corp's reputation, but by appointing an independent chair and seating truly independent board members, the company could begin the process of re-establishing public trust.

"Short of these measures, these scandals will continue to cloud the company and its stock for the foreseeable future."

Meanwhile the chairman of the US Senate Committee on Commerce, Science and Transportation has asked Lord Justice Leveson whether his inquiry into press standards had uncovered any new information suggesting News International's conduct involved US citizens or violated US laws.

Democratic senator Jay Rockefeller, who has sent a letter to the judge, raised questions about the extent of phone hacking at News International parent company News Corporation last summer, when the scandal erupted.

A statement on the senate committee's website said: "His new request for information comes as the Leveson Inquiry and other British investigations are disclosing large volumes of new information and documents about News International's widespread misconduct."

News Corp admitted the Commons Culture Committee had highlighted "hard truths", conceding there had been "serious wrongdoing" at the News of the World, that the company's response had been "too slow and too defensive", and that some employees had misled the MPs in 2009.

But the highly contentious investigation into the phone-hacking affair split the committee itself on party lines.

While members agreed unanimously that Mr Murdoch's media empire had misled their inquiry in a "blatant fashion", Tory MPs refused to support the report after Labour and the sole Liberal Democrat pushed through the criticism of Mr Murdoch by a vote of six to four.

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