News Corp has settled a legal case with a shareholder group that were unhappy with the way Rupert Murdoch and senior executives and board members were running the media company and averted a full blown legal case with a US$139 million payment.
A group of US union and pension fund investors in News Corp, led by New York-based Amalgamated Bank, lodged a legal complaint against the media giant’s board, including Rupert Murdoch, in 2011.
Linking the phone hacking scandal in the UK to other News Corp activities, the group, which had filed a suit against News Corp in a Delaware court, cited accusations dating back a number of years and amended its complaint over time.
The group accused News Corp’s board of “utter failure to curb Murdoch’s use of the Company’s money to pursue his own agenda” and of consistently placing Murdoch’s interests ahead of News Corp’s public shareholders. Other examples cited in the complaint include the board’s endorsement of plans to repurchase shares from John Malone, protecting Murdoch’s control of News Corp at the expense of giving up on profits in US pay TV service DirecTV, and News Corp’s recent purchase of Elisabeth Murdoch’s production company Shine.
News Corp issued a brief statement yesterday regarding the agreement to settle the pending litigation. It said: “We are pleased to have resolved this matter. The agreement reflects the important steps News Corporation has taken over the last year to strengthen our corporate governance and compliance structure and we have committed to building on those efforts going forward.”