New Hacking Allegations Expected at News Corp. Shareholder Meeting

Occupy Wall Street converged early Friday on the Fox lot for the annual shareholders meeting

Last Updated: October 21, 2011 @ 9:27 AM

(Updated: 9:26 am PST)

Unhappy shareholders and Occupy Wall Street protesters gathered early Friday in front of the Fox Lot to protest the News Corp.'s annual shareholders meeting, where CEO Rupert Murdoch and his two sons will face demands that they exit the board.

British MP Tom Watson told reporters that he will attend the meeting as a representative of the AFL-CIO and will reveal new instances of illegal activities at News Corp.’s UK tabloid. 

Occupy Wall Street is hoping to occupy the Zanuck Theater. It promises to be a rocky meeting for News Corp. brass, which has been under attack for months due to a phone-hacking scandal and a series of other supposed misdeeds.

Also read: A Rupert Murdoch Peer: He's 'Dead Money'

Several investor and proxy advisory groups are pushing for major changes, in some cases calling for the ejection of all three Murdochs from the board. That would be Rupert Murdoch, his youngest son, James, and his eldest son, Lachlan.

While the Murdoch family's powerful controlling stock interest will likely keep the heads of conglomerate's board off the sticks, it won't be a comfortable meeting for them.

Tom Watson, a member of the British Parliament and one of Rupert Murdoch's harshest critics, has promised to show up with fresh information that "will leave the company liable to civil liability but also huge reputational harm." Watson, a close ally of former British Prime Minister Gordon Brown, has been an outspoken critic of News Corp. and its practices.

Also read: Will Another Murdoch Ever Run News Corp.?

Besides the phone-hacking scandal at its News of the World tabloid, which the company has since closed, the company is dealing with fallout from fresh allegations that European Wall Street Journal operators arranged a scheme to buy their own paper in order to bump up circulation figures.

Just Thursday, News International, News Corp.'s British publishing subsidiary, announced up to 200 layoffs and buyouts at another of its U.K. papers, the Times of London.

Reuters reported that a number of investors are closely examining recommendations by proxy advisory groups ISS and Glass Lewis that they vote out as many as 13 of News Corp.'s 15 directors.

"Ninety-nine percent of the time we vote with Glass Lewis on these kind of matters," said Donald Yacktman, president and co-chief investment officer of Yacktman Asset Management Co in Austin, Texas, to the wire service.

According to Reuters, Glass Lewis alone specifically recommended that its clients withhold their votes for six directors including James and Lachlan Murdoch, along with CFO David Devoe and Arthur Siskind, a senior adviser to Murdoch.

Also read: Occupy Wall Street Swarms Rupert Murdoch's Home on 'Millionaire's March'

Occupy Wall Street offshoot Occupy Los Angeles, meanwhile, is unhappy with Fox News coverage, and is encouraging members to head on over to Century City Friday in protest.

Of course, with the three Murdochs controlling about 40 percent of News Corp.'s class B shares, and Saudi Prince Al Waleed bin Talal lock step with them and controlling another 7 percent, the chances of any one of the current 15 News Corp. board members getting removed by majority vote Friday is virtually non-existent.

Then again, a powerful display of shareholder no-confidence could still have an impact.

In 2004, for example, a Roy Disney-led campaign to oust Michael Eisner from the Walt Disney board of directors failed. But Eisner relinquished his CEO post 20 months later (keeping the chairmanship), after receiving a 43 percent no-confidence vote at the company's shareholders meeting.

Keep
Reading...

Looks like you’re enjoying reading
Keep reading by creating
a free account or logging in.