Things continue to look worse for Rupert Murdoch and company.
Following last week’s revelation that a pair of former News of the World executives told a London parliamentary hearing that they had notified Murdoch’s son in early 2008 that evidence pointed to the tabloid’s phone hacking not being limited to a solitary reporter, the company’s shareholders are now accusing the board of more serious wrongdoing.
A group of News Corp. shareholders yesterday amended a lawsuit filed in March that alleges Chairman and CEO Murdoch and the company’s board members shirked their responsibilities to oversee the businesses practices and decisions. And the accusations are scathing.
“The Board has not lifted a finger to engage in any oversight of Murdoch’s rule, even when it was provided with clear and unmistakable warnings that News Corp.’s business practices were not only unethical, but also illegal,” the amended suit states. “Worse yet, the Board in bad faith allowed itself to become an outright accomplice to Murdoch’s self-interested breaches of duty, repeatedly approving transactions whose core purpose was to entrench Murdoch and consolidate his control, and to siphon away value from News Corp. and its shareholders for Murdoch, his family, and his friends.”
These most recent allegations stem from decades-old suspected corporate espionage at a pair of News Corp.’s U.S. business units—News America Marketing and News Digital Systems Group. The subsidiaries were accused of stealing computer technology, hacking into competitors’ computers and systems, and generally engaging in anticompetitive behavior, according to the original lawsuit. News Corp. eventually paid more than $650 million in settlements to a handful of its competitors.
The original lawsuit was brought in a Delaware court by Amalgamated Bank, which manages investment funds that own News Corp. stock. It initially revolved around charges of nepotism, but has since grown to include the phone hacking scandal and now corporate espionage.
For more on News Corp.’s worsening legal situation, read the Los Angeles Times.
