Shareholders rally against Rupert Murdoch

Angry shareholders have lashed out at Rupert Murdoch, the head of News Corp, but an attempt to curb the media mogul’s powers failed as he pledged to ensure no repetition of a British phone-hacking scandal. 

A string of shareholders, including a British politician who spearheaded the investigation into the scandal, lined up on Friday to at the company’s AGM in Los Angeles to call for Murdoch and his sons to lose some or all of their power on the board of directors. 

However, with Murdoch owning nearly 40 per cent of voting shares and enjoying the backing by a Saudi royal with another seven per cent, the 15-member board, including Murdoch and sons James and Lachlan, was re-elected at the annual stockholders’ meeting. 

A proposal to strip the 80-year-old of his role as chairman was also defeated, while plans by the board of directors to retain control over executive pay were approved, according to voting results released a few hours after the meeting.

Repeated exchanges
 
Murdoch repeatedly voiced contrition and pledged to get to the bottom of the British scandal, but appeared irritated at one or two more vociferous critics.

“You’ve been treating us like mushrooms for a long time,” Stephen Mayne, head of the Australian Shareholders Association, said at the 90-minute meeting held at News Corp’s Fox Studios in the US city. 

“You’re still trying to do it,” he added, in repeated exchanges with Murdoch.

Tom Watson, the head of the British parliamentary committee where Murdoch was hit with a foam pie by a protester in July, said more alleged hacking details were expected to come out, which News Corp investors should know about. 

“I believe that people working for News International commissioned private investigators to obtain information through computer hacking,” he said, adding that the victims included a former army intelligence officer.

“I think that that could expose this company to huge costs when it comes to civil litigation … the board (of directors) have a duty to let shareholders know that.” 

Murdoch started the meeting by another acknowledgment of responsibility about the hacking scandal, while also saying it should be seen in the context of News Corp’s overall commercial success.

“We cannot just be a profitable company, we must be a principled company … We must admit to and confront our mistakes and establish a rigorous and vigorous procedure to put things right,” he said. 

“There is simply no excuse for such unethical behaviour,” he said of the hacking of mobile phones by journalists from the now defunct British tabloid weekly the News of the World.

‘Hold ourselves to account’ 

Shortly before Murdoch’s appearance, News Corp’s British newspaper arm News International confirmed it would pay $3.2 million to the family of a murdered girl at the heart of the hacking scandal.

In a joint statement with the family of Milly Dowler, Murdoch said he would personally donate $1.5m to charities chosen by the family.

Reports of the settlement by News International first emerged in September, but had not been confirmed by the firm. 

The 168-year-old News of the World was shut down after a public outcry when it emerged that a private investigator working for the paper hacked into Dowler’s voicemail after she went missing in 2002. 

At Friday’s meeting, Murdoch said: “These are real issues that we must confront and are confronting … If we hold others to account we must hold ourselves to account.” 

“I am personally determined to right whatever wrong has been committed and to make sure that it doesn’t happen again anywhere in our company.” 

As the meeting got under way, scores of demonstrators protested against the company.