News Corp.'s US Shareholder Case Adds Hacking Claims

Monday, 11 Jul 2011 10:54 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
News Corp. shareholders suing over the purchase of a business run by Chairman Rupert Murdoch's daughter filed a revised complaint, saying the British phone hacking scandal reflects how the company's board fails to do its job.

Shareholders called it "inconceivable" that directors were not aware sooner of the questionable news practices that led to the closure of the News of the World tabloid, given that news of the hackings first surfaced in 2005.

This, the shareholders said, reflects a board that "provides no effective review or oversight," in a corporate culture "run amuck," according to the amended complaint dated July 8 and filed in Delaware Chancery Court. Lawyers for the shareholders provided a copy of the complaint on Monday.

The shareholders had sued News Corp.'s board in March over the agreement to buy Shine Group Ltd., a television and film production company run by Elisabeth Murdoch, for an estimated $480 million in equity plus $135 million of debt.

They contend the purchase had no legitimate strategic or business purpose, but that Rupert Murdoch agreed to it out of "blatant nepotism" to give his daughter a seat on News Corp.'s board, and giving her a $250 million windfall.

News Corp. has described the claims relating to Shine as meritless.

The plaintiffs include a trustee for several investment funds, and union and pension funds led by the New Orleans Employees' Retirement System and the Central Laborers Pension Fund. The lawsuit seeks to force directors to pay damages to News Corp for having breached their fiduciary duties.

Shares of News Corp. were down 5.9 percent at $15.77 in morning trading.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved