Murdoch 'unfit to run company'
Updated: 2012-05-01 22:21
LONDON - Rupert Murdoch is unfit to run a major international company, British lawmakers said on Tuesday, finding him responsible for a culture of illegal phone hacking that has convulsed his News Corporation media empire.
Pulling few punches, the lawmakers listed failings of the 81-year-old News Corp chief, his son James and a company they said had showed "wilful blindness" about the scale of hacking that existed at the British News of the World tabloid.
Members of Parliament face the media during the Department of Culture Media and Sport press conference announcing a cross-party report on phone hacking at Portcullis House in London May 1, 2012. [Photo/Agencies]
The cross-party parliamentary committee, which approved the report by a majority of six to four, also scolded News Corp's British newspaper arm for misleading the British parliament during its five year investigation into the hacking of the phones of celebrities, murder victims, politicians and soldiers.
But it split along party lines, with members from Prime Minister David Cameron's Conservative Party voting against the report, saying they did not agree with its view that the Australian-born Murdoch was not fit to run a major company.
Cameron, who has acknowledged that Britain's political elite had been in thrall to the Murdochs for years, is facing criticism ahead of local elections this week that he was too close to the media tycoon.
The report said there had been huge failures in corporate governance which raised questions about the competence of Rupert's 39-year-old son, James.
"News International and its parent News Corporation exhibited wilful blindness, for which the companies' directors -including Rupert Murdoch and James Murdoch - should ultimately take responsibility," it said.
"Their instinct throughout, until it was too late, was to cover up rather than seek out wrongdoing and discipline the perpetrators," the lawmakers said in an 85 page report.
"We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company," it wrote.
The hacking scandal has not affected most of Murdoch's global media empire, which includes the Wall Street Journal, 20th Century Fox and pay-TV operations around the world.
But it could persuade shareholders of News Corp that Australian-born Rupert Murdoch should step back from the helm of his $50 billion media empire.
It has already forced James Murdoch to sever almost all his ties with Britain, although he still holds a directorship of Britain's biggest satellite TV firm BSkyB, which News Corp had sought to take over before the scandal.
British media regulator Ofcom is investigating whether BSkyB, which is 39 percent owned by News Corp, is a "fit and proper" owner of a broadcast licence, which entails an examination of the company's officers and shareholders.
James Murdoch recently stepped down as chairman of BSkyB in response to the scrutiny the broadcaster is facing as a result of the hacking scandal. The regulator said on Tuesday it was reading the parliamentary report with interest.
Traders said the committee had few teeth so there had been little movement in BSkyB shares, which were up 0.8 percent in London at 1114 GMT, slightly outperforming a 0.4 percent rise on the broad FTSE 100 index.
Not fit to rule?
The impact of the report may also be diminished by the fact it was split largely along party political lines.
"None of us were able to support the report and we all voted against it," Conservative lawmaker Louise Mensch said, referring to her party members. "It will be correctly seen as a partisan report and we've lost a very great deal of its credibility, which is an enormous shame."
Mensch said she would have supported the report if the reference to Rupert Murdoch being unfit to run a major international company had been removed.
Murdoch, who took London by storm in the 1960s before moving to New York on his quest to become the world's most powerful media tycoon, has apologised for the scandal.
He told a judicial inquiry into press ethics last week that senior staff at his British newspaper publisher had hidden the hacking scandal, saying he had been betrayed by minions.
News Corp said in a statement it was carefully reviewing the report, adding that it "fully acknowledges significant wrongdoing at News of the World and apologises to everyone whose privacy was invaded".