News Corp board backs Murdoch's 'fitness'

AP News
Posted: May 02, 2012 4:22 PM
News Corp board backs Murdoch's 'fitness'

News Corp.'s board of directors on Wednesday announced its "full confidence in Rupert Murdoch's fitness" and backed the CEO's leadership amid a probe of phone hacking and bribery by the company's U.K. newspapers.

The declaration _ from a board that governance experts have said lacked independence _ came a day after a British parliamentary committee said Murdoch was "not a fit person" to head a major international company.

The 81-year-old Murdoch built News Corp. from a single Australian newspaper and controls the media conglomerate through a family trust that owns nearly 40 percent of voting shares.

He has come under fire by British lawmakers after two appearances before them since the scandal broke last summer.

"The board based its vote of confidence on Rupert Murdoch's vision and leadership in building News Corporation, his ongoing performance as chairman and CEO, and his demonstrated resolve to address the mistakes of the company identified in the select committee's report," the board said in a statement.

The question of Murdoch's so-called "fitness" has extra meaning in Britain because its communications regulator, known as OfCom, is examining whether broadcasting giant British Sky Broadcasting passes its "fit and proper" test to be a broadcast license holder. News Corp. owns 39 percent of BSkyB. The hacking scandal derailed its bid to acquire full control and could jeopardize the stake it owns now.

Analysts have said that if News Corp. were to be forced to sell its BSkyB shares, it might receive more for them than is currently reflected in its own share price.

That is one explanation for why News Corp. shares have held steady since the committee's report was released.

News Corp.'s widely traded non-voting Class A shares rose 10 cents to $19.89 on Wednesday, after closing up 18 cents, or nearly 1 percent, at $19.79 on Tuesday.