News Corp shareholders take fresh action against Murdoch

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Joseph O'Halloran ©RapidTVNews | 14-09-2011

The blows to Rupert Murdoch’s News Corp Empire keep coming: just as James Murdoch was recalled to a UK Parliamentary Committee hearing, News Corp shareholders have brought fresh charges against the media giant's senior management and board of directors.

The new charges have been filed in a complaint to the Delaware Court of Chancery by shareholders including Amalgamated Bank, trustee for various LongView investment funds; the New Orleans Employees' Retirement System; and Central Laborers Pension Fund.

The charges are being brought as result of what the shareholders consider repeated failures to correct illegal conduct that has severely battered the company's reputation and market value. In particular the action outlines what it calls a “litany of misconduct” at company's US subsidiaries including computer hacking, privacy breaches, anticompetitive behaviour.

Moreover the shareholders allege that the News Corp board refused to curb serial wrongdoing at multiple divisions.

In terms of the new action, shareholders allege that based on the reported longevity of documented wrongdoing – in some cases going back at least to the late 1990s – News Corp's board was well aware of widespread misconduct at several of its U.S. subsidiaries. They note that the company was forced to pay nearly $1 billion in verdicts and settlements resulting from third-party privacy breaches at its consumer marketing unit News America Marketing.

"The revelations surrounding News Corp's corporate governance lapses get worse with each new disclosure," said Jay Eisenhofer, partner of Grant & Eisenhofer, one of two leading legal firms retained by the shareholders to lead the action. "In fact, our new complaint shows that the illicit phone hacking and subsequent cover-ups at News of the World were part of a much broader, historic pattern of corruption at News Corp, under the acquiescence of a board that was fully aware of the wrongdoing, if not directly complicit in the actions."

Less than six months ago, Amalgamated Bank of New York and the Central Laborers Pension Fund took action against Murdoch at the same court over what they regarded as nepotism in News Corp’s purchase of TV production firm Shine Group, owned by Murdoch’s daughter Elisabeth, in what was described as a “sweetheart” deal worth £415 million .The plaintiffs at the time argued that the principal basis of the deal was to maintain the Murdoch family’s involvement in senior management of the media empire.

Read more: News Corp shareholders take fresh action against Murdoch | News | Rapid TV News
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