News Corp in limbo as inquiries close in – FT.com
About 54 per cent of independent investors supported James Murdoch’s re-election last November as BSkyB’s chairman. Since then, the attitude of several shareholders who gave him the benefit of the doubt has hardened. “An independent chairman [not linked to News Corp] is what’s required in my view,” said one top 10 shareholder, who declined to be named.
Another shareholder said: “The mood is shifting more towards a belief that [Mr Murdoch] should step down as chairman and become a non-executive director.” He added, however, that Nick Ferguson, BSKyB’s senior independent director remained “resolute that there should be no change”.
“Shareholders have made clear to the BSkyB board that the company would benefit from a new chairman. They will do the same again over the next few weeks. Perhaps the next step will be to demand Nick Ferguson goes,” the shareholder said.
A third investor said Mr Murdoch’s position looked “increasingly untenable”, adding: “Even his cheerleaders are having doubts. It looks as if the sand on which he is standing is being washed away”.
But Mr Ferguson and other directors backed Mr Murdoch unanimously in November, and will “hold fast” unless investigations challenge his version of events, one person familiar with their position said. A person close to the board added: “While the board continues to listen to all shareholders at all times, its decision to back James Murdoch was supported by a majority of independent shareholders.”
The board will pay particular attention to a report expected soon from the House of Commons media select committee, and may have to change its stance if Mr Murdoch is severely criticised. If Ofcom were to judge that he is not a “fit and proper person” to lead the company, or even that News Corp is not a fit controlling shareholder, directors would have little choice but to change chairman.
Claudio Aspesi of Bernstein Research said: “The Sky board has to make a determination on whether to create a sharper separation between the company and News Corp by changing the chairman. That is fundamentally the next question coming up for both News Corp and independent board members.”