Calpers Attacks News Corp. on Share Structure

Thursday, 21 Jul 2011 08:30 AM

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News Corp. has a fresh critic, and it doesn't involve hacking at this time. The California Public Employees’ Retirement System, the largest U.S. public pension, is blasting the company's shareholder structure, claiming it allows Rupert Murdoch’s family too much control over the company.

The dual-class share structure gives the Murdoch family 40 percent of the voting rights in a company in which it owns 12 percent, which is a "a corruption of the governance system," says Anne Simpson, senior portfolio manager Calpers Global Equity and its corporate governance chief, according to the Financial Times.

"Power should reflect capital at risk. Calpers sees the voting structure in a company as critical. The situation is very serious and we’re considering our options. We don’t intend to be spectators – we’re owners," Simpson says.

rupertmurdoch200getty.jpg
Rupert Murdoch
(Getty Images photo)
"Dual class voting is one way to pervert the alignment of ownership and control."

Calpers owns almost 7 million shares in News Corp, worth about $110 million in a company with a market capitalization of almost $42 billion, the newspaper adds.

News Corp. is battling a hacking scandal that has resulted in the closure of its News of the World tabloid and high-level firings.

Yet one News Corp. shareholder, Saudi Prince Alwaleed bin Talal Al Saud, says he still supports the company.

Alwaleed remains "both supportive and confident in the leadership of Rupert and James Murdoch," the prince says, according to Bloomberg.
News Corp., owner of the Fox TV networks and the Wall Street Journal, has seen its shares fall 12 percent on the Nasdaq Stock Market since allegations surfaced July 4 that the News of the World hacked into the voice mail of a murdered schoolgirl.

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