Murdoch to face News Corp. shareholders on Fox lot

AP News
Posted: Oct 21, 2011 8:17 AM
Murdoch to face News Corp. shareholders on Fox lot

News Corp. CEO Rupert Murdoch faces shareholders with small stakes in his company for the first time Friday since a phone-hacking scandal broke in July. The annual general meeting promises to be full of fireworks as British lawmaker Tom Watson plans to use the event to reveal new details of what he claims are covert surveillance techniques by company employees.

The annual general meeting will take place Friday morning in Los Angeles on the lot of the company's movie studio, 20th Century Fox.

The media conglomerate has been rocked by evidence that its now-shuttered British tabloid, News of the World, hired a private investigator who tapped into the cellphone voicemail of a 13-year-old who disappeared in 2002 and was later found murdered.

Murdoch and his son James, who is in line to succeed him, were grilled by Watson and other lawmakers in a parliamentary committee hearing in late July. The elder Murdoch said he was ashamed at what happened but declined to take personal blame. He said he was the best person "to clean this up."

Watson told reporters Thursday that he will show that News Corp. used techniques that go "beyond phone hacking" into other technological means that could leave the company open to civil lawsuits and further damage to its reputation. News Corp. officials declined to comment.

Murdoch controls News Corp. through his family trust's 40 percent stake of voting shares. A key backer is Saudi Prince Alwaleed bin Talal, who controls 7 percent. The voting stock represents less than a third of the company's total $44.4 billion market value.

That dual-class share system has come under renewed fire. Critics say the company's board is dysfunctional and management has poor oversight of the company.

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Proxy advisory firm Institutional Shareholder Services has recommended voting out all existing board members, including Murdoch and his sons James and Lachlan. Two other firms, Glass Lewis and Egan-Jones, recommend voting against the sons, among others.

Jay Eisenhofer, co-lead attorney in a shareholder lawsuit against News Corp. on charges of mishandling the affair, said on a conference call with Watson on Thursday if even 20 percent of votes are cast against the reelection of Murdoch and his two sons, it would be a victory.

That's because that approach half the 53 percent of votes unaffiliated with the family, he said.