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News Corp. shareholders amend complaint to reflect phone-hacking scandal

Lawsuit alleges nepotism and board misconduct

The media sector was rocked last week when news broke that journalists from the British tabloid newspaper News of the World, published by News Corp., stood accused of hacking into the phone messages of various U.K. citizens including celebrities, a young murder victim, and possibly the royal family and former prime minister Gordon Brown.

Amidst the scandal, the 168-year-old newspaper announced that yesterday’s Sunday issue would be its last ever.

But even prior to the voicemail debacle, News Corp. and its CEO and chairman, Rupert Murdoch, faced other allegations of wrongdoing. In March, a group of U.S. shareholders sued the company’s board for purchasing a TV and film production business owned by Murdoch’s daughter. The shareholders accused Murdoch of “blatant nepotism” and sought an order that would require directors to pay damages to News Corp. for breaching their fiduciary duties.

On July 8, lawyers representing the shareholders submitted a revised complaint to the Delaware Chancery Court. The amended complaint contends that the latest hacking scandal reflects News Corp.’s board of directors’ questionable judgment and business practices.

Ashley Post

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