A committee of U.K. lawmakers issued a report saying media mogul Rupert Murdoch is "not a fit person" to lead an international company in light of his newspapers' phone-hacking scandals. The scathing report may affect his control of broadcaster BSkyB.
News Corp. Chairman Rupert Murdoch is “not a fit person” to lead a major international company, a committee of U.K. lawmakers said, after his British unit misled Parliament about the extent of phone hacking at its News of the World tabloid.
Murdoch “turned a blind eye and exhibited willful blindness to what was going on in his companies,” the House of Commons Culture Committee said in a report Tuesday that split lawmakers along party lines on critical findings. “This culture, we consider, permeated from the top throughout the organization and speaks volumes about the lack of effective corporate governance at News Corp.”
The report may increase the likelihood that U.K. regulator Ofcom concludes News Corp. is unfit to hold a broadcasting license and asks the company to reduce its 39 percent stake in British Sky Broadcasting Group.
The phone-hacking scandal prompted News Corp. to abandon a $12.7 billion bid for the rest of BSkyB, the U.K.’s biggest pay-television provider, last year.
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Tim Bale, a Sussex University politics professor, said he was surprised by the report’s strong language.
“It’s clearly not good news,” Bale said, adding that the report contained “really serious” accusations. “They clearly must have been hoping that the committee would have been more measured and more cautious.”
While the report contained “hard truths” for News Corp., the company has already confronted the problems documented by conducting internal reviews of its newspapers, the company said.
“We certainly should have acted more quickly and aggressively to uncover wrongdoing,” Murdoch said. “We deeply regret what took place and have taken our share of responsibility for not rectifying the situation sooner.”
Three executives at the News International unit — Les Hinton, Tom Crone and Colin Myler — gave misleading testimony to the committee in 2009, the panel said in London.
The company failed to disclose documents and made statements that “were not fully truthful,” and Murdoch, 81, and his son James must take responsibility, the lawmakers said.
The panel has been working on its report since July, when the Murdochs were summoned to testify about their roles in the scandal. Father and son told a media-ethics inquiry last week that underlings, particularly Crone and Myler, were to blame for their failure to detect any wrongdoing at the now defunct newspaper.
“The News of the World and News International misled the committee about the true nature and extent of the internal investigations they professed to have carried out in relation to phone hacking,” the panel said. “Their instinct throughout was to cover up rather than seek out wrongdoing.”
Four Conservative Party members voted against the committee’s statement. One of them, Louise Mensch, said the dissenters “felt that was ultimately outside the scope of a select committee.”
“Rupert Murdoch clearly is a fit and proper person to run an international company,” said Philip Davies, another dissenting Conservative. “We’ve seen absolutely no evidence to suggest that Rupert Murdoch was aware these things were going on.”
The division along party lines may lead to further suggestions that Prime Minister David Cameron and his Conservatives are too close to Murdoch.
Ofcom has said it will draw upon the report for its decision on News Corp.’s fitness to hold a broadcasting license, it said Tuesday.