(September 14, 2011) — Pension funds and other News Corp shareholders have brought fresh charges against the media firm stemming from its phone-hacking scandal.
The shareholders — including the New Orleans Employees’ Retirement System and Central Laborers Pension Fund — stated that the “still unfolding hacking scandal is just a continuation of the board’s malfeasance.” In the new filing, shareholders have highlighted cases involving several News Corp US subsidiaries which suggest that hacking, privacy breaches, and anticompetitive practices were not restricted to the newspaper division.
Additionally, the new filing includes wrongdoing at two more Rupert Murdoch-owned companies — News America Marketing and NDS Group. The new charges are contained in a second amended complaint filed in Delaware Court of Chancery by News Corp. shareholders. The shareholders are represented by law firms Grant & Eisenhofer and Bernstein Litowitz Berger & Grossmann.
In July, the Massachusetts Laborers’ Pension and Annuity Funds (Mass. Labor) filed a lawsuit against Rupert Murdoch and the other directors of media giant News Corporation, adding to the list of shareholders suing the company for failure to act in the wake of the recent phone hacking scandal.
The Burlington, MA based Mass. Labor filed the suit in the Delaware Chancery Court on July 15. In the lawsuit, Mass. Labor accused Murdoch and the directors of “failure to take any action to investigate, control, and limit the fallout from the hacking scandal” that “caused the Company to lose billions of dollars in value,” according to the suit. The suit also alleged that Murdoch engaged in nepotistic business practices that bought companies run by family members for inflated prices and that the phone hacking scandal prevented News Corp from acquiring British Sky Broadcasting Group PLC, a move which would have helped increase the value of News Corp.
The main claim of the plaintiffs in the suit was that Murdoch and the board of News Corp failed to intervene in response to the phone hacking allegations against the company. “These revelations should not have taken years to uncover and stop,” reads the amended complaint, which was filed on July 8, and was obtained by Bloomberg. “These revelations show a culture run amuck within News Corp. and a board that provides no effective review or oversight.”
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742