Shareholder group Pirc says Rupert Murdoch's son should not be director due to close association with phone-hacking scandal

This article is more than 9 years old

This article is more than 9 years old

Investors in News Corporation, Rupert Murdoch's media company, were urged on Tuesday to vote against the re-election of his son James Murdoch as a company director by an influential shareholder group.

Murdoch's youngest son is the company's deputy chief operating officer, the third most powerful executive at the company overseeing News Corp's European and Asian businesses including News International and BSkyB, and has been earmarked by his father as his successor.

Pirc, which advises shareholders on corporate governance issues, said: "In light of his close association with the phone-hacking scandal we are advising shareholders to oppose James Murdoch's election."

Pirc said in written advice on Tuesday: "We question James Murdoch's suitability as a senior executive and potential successor to Rupert Murdoch. As a senior executive at News International it is unclear why he did not initiate in-depth inquiries at an earlier stage and why former colleagues now directly and publicly contradict his stated position that he was unaware that hacking extended beyond [Clive] Goodman [the News of the World's former royal editor]."

Murdoch insists he was not told about an email which indicated that phone hacking at the paper was being carried out by more than one "rogue reporter", Goodman.

The News of the World's former editor Colin Myler and its head of legal Tom Crone have disputed this. Murdoch has been recalled to appear before MPs on the Commons culture, media and sport committee later this year to explain the discrepancy.

"Up until the closure of the News of the World, News International's response to the unfolding events had not been decisive and featured a number of arrests and resignations rather than dismissals," Pirc added.

Pirc has consistently opposed the re-election of News Corp directors with close links to Rupert Murdoch, the company's chairman and chief executive, including James Murdoch.

"Pirc's key governance concerns focus on the position of James Murdoch as a member of the News Corp board and the implications for minority investors of continuing dominance of the company by the Murdoch family," the group added.

Family trusts controlled by the Murdoch own 12% of News Corp but control around 40% of shares with voting rights, effectively giving them the power to veto any takeover bid.

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