RUPERT Murdoch faced the prospect of his own shareholders suing him yesterday after disgruntled investors made their case for holding Murdoch and his son James responsible for the cost to News Corp of the phone hacking scandal.
A group of shareholders are seeking to have their case against Rupert and James heard in the US courts, claiming the company’s board treated the firm as a “family candy jar” and protected executives’ interests ahead of News Corp’s. The company is trying to have the case thrown out before a trial begins.
A Delaware hearing yesterday saw accusations from the prosecution – representing a New York bank and Illinois pension fund – alleging that Rupert and James Murdoch had been aware that News of the World journalists were hacking into phones and bribing police officers.
The scandal has closed the News of the World and scuppered News Corp’s deal for BSkyB, two blows for the company’s investors. News Corp has since announced plans to split into two to protect its valuable 20th Century Fox network from the problems stemming from the British newspapers.
“All of this harm occurred because the board chose to protect those close to Murdoch rather than investigate the misconduct when it learned about it,” the shareholders said in June.
The hearing continues.