The phone hacking scandal seems to be taking its toll on Rupert Murdoch’s hold on his media empire. Last week, News Corporation shareholders issued a “damning verdict” to his son James Murdoch, the companyís deputy chief operating officer, and cast his future at the helm of the company deeply into doubt. At an annual meeting in Los Angeles last week, shareholders voted for the most part against reinstating James Murdoch and his brother Lachlan to the board. 35 percent of shareholders voted against the re-election of James Murdoch and 34 percent against his brother. Rupert Murdoch remained popular with investors, 84.4 percent of whom voted for his re-election, but a good number who represented 12 million votes abstained.
Shareholders also signaled their wish for more independence on the News Corp. board with more than 35 percent voting against Natalie Bancroft, a scion of the family that sold Dow Jones to News Corp., and more than 32 percent voting against Andrew S. B. Knight, who is a former executive of News Corp. and now heads the board’s compensation committee. Chase Carey, the News Corporationís chief operating officer and now Murdoch’s likely successor, received 90.5 percent of the vote. The two newest directors — former New York City schools chancellor Joel I. Klein and the venture capitalist James W. Breyer — each received more than 96 percent of the vote.
All eyes have been on James Murdoch over the phone hacking scandal and especially regarding his statements about what he knew or did not know about how extensive a practice phone hacking was. He is to be called back for questioning by the Parliament culture, media and sport select committee next month.
Facing questioning by the committee on Monday was Les Hinton, the former chairman of the News of the World’s UK parent News International who stepped down as the CEO of Dow Jones in July as details of the phone hacking scandal surface. Hinton, who was questioned via satellite, said that he was right to tell Parliament in 2009 that phone hacking at the NoW was restricted to a single reporter. It has since emerged that Hinton had been sent a letter in 2007 from NoW former royals editor Clive Goodman that suggested that hacking was far more widespread. Hinton downplayed the contents of the letter (“I don’t think I’d regard Mr Goodman’s letter as evidence of anything. They were accusations and allegations”) and said he was hard pressed to remember events from up to four years ago.
That prompted Labour MP Paul Farrelly to jokingly compare Hinton to a mushroom. “You seem to have been kept in the dark by a lot of people,” Farrelly said.
Any chance that James Murdoch might invoke some of the “mushroom defense” too when he faces the committee next month?
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