Opposition to Sky Takeover Fueled by New Murdoch Hacking Scandal

After Rupert Murdoch’s ran into opposition as chairman of the pay-TV broadcaster and after the billionaire’s U.K. publishing arm admitted hacking computers, opponents of his bid to take over Sky Plc gained fresh ammunition.

As part of a lawsuit settlement in London, News UK admitted “vicarious liability”. a former British Army intelligence officer, Hurst’s attorney, Jeremy Reed, said that to a private investigator who hacked the computer of Ian Hurst, was hired by the Irish edition of the company’s News of the World tabloid. After Hurst had written a book about his experiences in Northern Ireland, the interception of his emails took place more than a decade ago.

Saying the board needs independent oversight, especially in light of the 11.7 billion-pound ($15.3 billion) offer from Murdoch’s 21st Century Fox Inc., it would vote against the re-election of James Murdoch as Sky chairman, Sky investor Royal London Asset Management said separately on Friday.

Conduct-related arguments that the Murdochs’ opponents have seized upon as they seek to derail the Sky deal were fed by the hacking admission and shareholder revolt. The transaction’s regulatory review has already been helped by questions about the Murdochs’ corporate-governance failings. Creating another opportunity to voice criticisms in front of 44-year-old James Murdoch, who is also Fox’s chief executive officer, Sky holds its annual shareholder meeting on Oct. 12.

“This is a dramatic new revelation in the saga of criminality in Murdoch’s media empire,” Tom Watson, the deputy Labour Party leader and longtime Murdoch antagonist, said about the court admission. “Despite being asked about the use of private detectives by the News of the World at a parliamentary committee in 2011, it’s taken a 5-year civil case for the company to admit to further illegal behavior.”

Whether Fox’s acquisition of Sky would give Murdoch too much influence over the country’s media is being investigated by the U.K. Additionally, competition & Markets Authority. In light of hacking scandals in the U.K. and sexual harassment allegations in the U.S., regulators have been asked to look at the company’s broadcasting standards.

“After the initial shock of being informed that he was a victim of computer hacking and email interception, Mr. Hurst became increasingly shocked and appalled as he began to discover the extent of the unlawful activity against him,” Reed said.

Murdoch’s pursuit of Sky has been dogged for years by hacking. Revelations that reporters listened to voicemail messages on the phone of a murdered schoolgirl wrecked a deal in 2011 even his News Corp. was on the verge of securing approval of its bid. In addition to the closure of the News of the World, the U.K.’s largest newspaper, the resulting scandal led to criminal and judicial probes.

His media empire into two groups by Murdoch in addition. While News Corp. kept the publishing titles, Fox took over the film and TV assets.

“News Group newspapers is here today through me to offer its sincerest and unreserved apologies to Mr. Hurst,” Anthony Hudson, the publisher’s lawyer, said in court Friday. News UK “accepts that such activity happened, accepts that it should never have happened, and has undertaken to the court that it will never happen again.”’

(Adapted from CNBC)

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