14 Jul 2011

James Murdoch under pressure by shareholders

Washington Correspondent

An influential investor in BSkyB tells our Business Correspondent Siobhan Kennedy that an increasing number of shareholders are calling for James Murdoch to step down as the company’s chairman.

British shareholders of BskyB are calling for the resignation of James Murdoch as the company’s chairman amid fears the scandal surrounding the executive and News International will further hurt the satellite giant’s share price.

UK investors are not known for outspoken or public attacks on the companies but such is the growing anger at the News of the World phone hacking scandal that some have now decided to speak out.

The head of one of the country’s most influential shareholder groups told Channel 4 News that he knew of many investors who were furious about the potential contamination from News International‘s damaged reputation on BskyB and its shares. There was a growing consensus, he said, that it was time for James Murdoch to step down as chairman to stop the contamination from spreading any further.

James Murdoch

And another shareholder, who declined to be named, said he was going to meet with BskyB’s senior independent executive, Nick Ferguson, this week, to call on him to press for Mr Murdoch’s resignation.

He’ll also press the company’s investment banking advisers to urge Mr Murdoch to do the right thing and step down.

The shareholder acknowledged that most of BskyB’s share price fall in recent days was because of News Corp’s decision to withdraw its bid for the satellite broadcaster but he also insisted there was what he called a “James Murdoch discount” – which was further undermining the company’s share price.

He said that he’d spoken to several other investors in the City who felt the same way and did not rule out a joint effort to remove James Murdoch if their private efforts to eject him failed.

News that News International is planning to run a full page apology in this weekend’s broadsheets to try and draw a line under the scandal will no doubt do little to placate the investors, the public or politicians on both sides of the Atlantic.