News Corp’s shares soar despite scandal fall-outJune 2012
The investor backlash against the scandals surrounding News Corp appears to have stymied in recent weeks, despite criminal charges brought against former News of the World editor Rebekah Brooks and other senior company figures.
Rupert Murdoch’s media empire has seen the value of its shares soar to a level not seen since 2008, despite highly public accusations of criminal wrongdoing and a lack of transparency.
Last month, Brooks was charged in the UK with perverting the course of justice and also gave evidence at the Leveson Enquiry, set up to investigate the phone-hacking scandal, as well as the relationship between the UK media and the police.
Other leading figures in the global business, including Les Hinton, Colin Myler and Tom Crone, were accused of misleading parliament, meanwhile, as the phone-hacking scandal that has engulfed the firm for the last year shows little sign of abating.
Since the revolt against executives including Rupert’s son, James, and his subsequent resignation, investors have been quiet. One reason cited for the renewed enthusiasm for News Corp, in addition to its continuing profitability, are rumours that a bid to take full control of the BSkyB satellite TV operation could still be on the cards.
Chris Goodall, a former member of the Competition Commission, and now an analyst with Enders Analysis, said: “I can see some circumstances when News Corp could launch a successful bid within a few months, however strange this might look.”
News Corp has also, meanwhile, slashed the voting rights of all non US-based shareholders, after it discovered that over a third of voting stock was held by foreigners, thereby further curtailing the already limited representation of shareholders.
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