UK regulator finds BSkyB 'fit and proper' (Update)

Sep 20, 2012 by Robert Barr

(AP)—British Sky Broadcasting is a "fit and proper" company to hold an operating license, U.K. regulators said Thursday in response to the phone hacking scandal that engulfed the parent company. But it criticized the former CEO and chairman, James Murdoch, for poor management.

The company's license was called into question because of the scandal at a newspaper owned by News Corp., which effectively controls BSkyB through a 39 percent shareholding.

If the company had not be found "fit and proper" it could have been stripped of the license that yielded a net profit of $1.4 billion in the year ending June 30.

The Office of Communications, known as Ofcom, concluded that James Murdoch was not complicit in a cover up at the tabloid News of the World, but his failure to initiate appropriate action on a number of occasions was "difficult to comprehend and ill-judged."

The report also found no evidence that Rupert Murdoch, James' father and CEO of News Corp., "acted in a way that was inappropriate in relation to phone hacking, concealment or corruption by employees" of his British newspapers.

Though Ofcom said it might review the situation if there are further revelations, the decision removed any immediate threat of BSkyB losing its license. The company's shares were up 0.9 percent at 733.5 pence in late morning trading in London.

"After a lengthy review process, we are pleased that Ofcom has now reached its conclusion and we look forward to continuing to develop our business for the benefit of customers and shareholders alike," BSkyB said in a statement.

News Corp. also welcomed the regulator's decision but contended that some statements about James Murdoch were "not substantiated by evidence."

James Murdoch became executive chairman of News Group Newspapers—publisher of The Sun and the now-defunct News of the World—and its parent company News International—which also owns The Times newspapers—in January 2008 and held the position until February this year. Both companies are ultimately owned by News Corp.

The phone hacking scandal, along with other allegations, has spawned investigations by a Parliamentary committee, a formal inquiry led by a judge, criminal charges against some journalists—including Rebekah Brooks, former chief executive of News International—and civil suits which forced the company to pay large settlements.

Public outrage following reports that the phone of a young murder victim had been hacked also led to News Corp. deciding two years ago to drop its bid to take full control of BSkyB.

Ofcom noted contradictory evidence by James Murdoch and two former senior employees about when Murdoch became aware that phone hacking at the News of the World went far beyond the company's long-standing claim that it involved a single rogue reporter and a private detective.

However, it said there was no evidence that he knew of "widespread wrongdoing or criminality" at News of the World.

The regulator limited itself to criticizing James Murdoch's actions as company director.

"We consider James Murdoch's conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged."

Since February, James Murdoch has been a non-executive director of the company, and one of only four people on the 12-member board with connections to News Corp.

In May, the House of Commons' Culture, Media and Sport Committee concluded that Rupert Murdoch was "not a fit person to exercise the stewardship of a major international company." That conclusion, on a partisan split of 6-4, had no practical effect, however.

In its statement, News Corp. said it was pleased that Ofcom found that evidence related to misdeeds at the newspapers "does not provide any basis to conclude that News Corp. and Rupert Murdoch acted in a way that was inappropriate, and that there is similarly no evidence that James Murdoch deliberately engaged in any wrongdoing."

"We disagree, however, with certain of the report's statements about James Murdoch's prior actions as an executive and Director, which are not at all substantiated by evidence," News Corp. said.

Explore further: Weibo IPO below expectations, raises $285.6 mn

not rated yet
add to favorites email to friend print save as pdf

Related Stories

BSkyB declares itself 'fit and proper'

May 02, 2012

(AP) -- British Sky Broadcasting PLC on Wednesday defended itself as a "fit and proper" company, a day after Rupert Murdoch, the chief executive of the satellite broadcaster's biggest shareholder, was branded ...

James Murdoch steps down as BSkyB chairman

Apr 03, 2012

(AP) -- Media executive James Murdoch, under pressure over his role in Britain's tabloid phone hacking scandal, has stepped down as chairman of British Sky Broadcasting PLC, the company announced Tuesday.

James Murdoch out at News International

Feb 29, 2012

James Murdoch, the younger son of media tycoon Rupert Murdoch, stepped down Wednesday as executive chairman of News International, News Corp.'s scandal-plagued British newspaper unit.

Murdochs summoned to testify in phone hack inquiry

Jul 14, 2011

(AP) -- British lawmakers say News International chief Rebekah Brooks has agreed to testify before a parliamentary committee investigating phone hacking. Rupert and James Murdoch have been issued a summons ...

Myspace purchase a 'huge mistake': Murdoch

Oct 21, 2011

News Corp's purchase of Myspace was a "huge mistake" and the social network was mismanaged "in every possible way" following the acquisition, chief executive Rupert Murdoch said Friday.

Recommended for you

Weibo IPO below expectations, raises $285.6 mn

2 hours ago

Sina Weibo sold fewer shares than expected in its US IPO which was priced below expectations ahead of a Thursday listing that takes place after tech selloffs on Wall Street.

'Chief Yahoo' David Filo returns to board

3 hours ago

Yahoo announced the nomination of three new board members, including company co-founder David Filo, who earned the nickname and formal job title of "Chief Yahoo."

Fired Yahoo exec gets $58M for 15 months of work

4 hours ago

Yahoo's recently fired chief operating officer, Henrique de Castro, left the Internet company with a severance package of $58 million even though he lasted just 15 months on the job.

IBM posts lower 1Q earnings amid hardware slump (Update)

13 hours ago

IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exacerbated by weaker demand in China and emerging markets.

User comments : 0

More news stories

Sony's PlayStation 4 sales top seven million

Sony says it has sold seven million PlayStation 4 worldwide since its launch last year and admitted it can't make them fast enough, in a welcome change of fortune for the Japanese consumer electronics giant.

Robotics goes micro-scale

(Phys.org) —The development of light-driven 'micro-robots' that can autonomously investigate and manipulate the nano-scale environment in a microscope comes a step closer, thanks to new research from the ...

Biologists help solve fungi mysteries

(Phys.org) —A new genetic analysis revealing the previously unknown biodiversity and distribution of thousands of fungi in North America might also reveal a previously underappreciated contributor to climate ...