Tuesday 13 September 2011

James Murdoch under pressure as News Corp shareholders start lawsuit


The shareholders – Amalgamated Bank, New Orleans Employees' Retirement System and the Central Laborers Pension Fund – had already filed a claim in Delaware Chancery Court against News Corp's board for allowing "rampant nepotism" at the company. However, on Tuesday they lodged a much wider-ranging suit with allegations of "computer hacking, privacy breaches and extreme anti-competitive behaviour" in America, which they claimed "foreshadowed" allegations of phone hacking at the News of the World. News Corp was forced to pay out $1bn (£610m) in damages in a series of legal battles over alleged dirty tricks at its News America Marketing (NAM) and NDS Group subsidiaries. In one case, an NAM director testified to issuing "false press releases impugning a rival it was trying to purchase" and "mutilating and removing" competitors, the lawsuit said. So far, criticism of James Murdoch has focused on his handling of the phone hacking scandal, which preceded his tenure as News International chairman. However, the new lawsuit claims privacy breaches happened on his watch. "The illicit phone hacking and subsequent cover-ups at News of the World were part of a much broader, historic pattern of corruption at News Corp," said Jay Eisenhofer, the shareholders' lawyer. Before the scandal, James Murdoch was widely expected to succeed his father, Rupert, as chief executive and chairman of News Corp. But Rupert Murdoch has since appeared to be backing Mr Carey.