By Michael Collins
Is Murdoch getting ready to trade his kingdom for a horse? Supposedly, News Corp did a compliance review on the voting rights of foreign shareholders. The company discovered that it was way out of line for the amount of foreign shareholder voting rights, thus imperiling its bid to renew the licenses for it’s domestic television properties (based on the Communications Act of 1934).
“News Corp, which has spent most of the last year battling the fallout from the News of the World phone-hacking scandal, inadvertently allowed foreign investors to hold 36pc of Class B voting stock ”“ well past the 25pc limit enshrined in American 1934 Communications Act.
“In order to fix the problem, on Wednesday it suspended 50pc of the Class B voting rights of its investors outside the US, effectively halving the power of certain foreign investors.” The Telegraph, April 18 & Financial Times, April 18
This includes Prince Alwaleed bin Talal, Saudi investor, who will have his 7% share cut in half for voting. Talal is a big Murdoch supporter.
Two points. This is a sign of weakness. They knew or should have known this was the case but now they’re acting. News Corp probably got a tip from some “friendly” in government and preemptively corrected the problem. One commentator asked, When was the last time they reviewed voting rights, 1936?
The prompts the second point, which consists of questions? Was News Corp out of compliance on foreign voting shares when it last renewed it’s domestic broadcasting license? Will anyone in authority investigate? If they determine that the licenses were renewed with News Corp violating the 1934 Communications Act, will anything be done about it?
will react. And how unAmerican of News Corp.
Always keep an open mind and a compassionate heart. ~ Phil Jackson
Yes. No. No, peasants!
Rupert will do whatever he wants. Facts, what facts, he doesn’t need any stinking facts. He will just make them up as he goes along.
For those with a strong stomach, Rupert will testify before the Leveson phone hacking and the press hearings in London next week. Leveson was appointed by Cameron when Cameron was flying cover for Murdoch. Since Murdoch’s attacks on Cameron, Leveson may be free to really rake old Rupert over the coals (if Leveson is so inclined).
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Murdoch is pulling out all the stops, including this nonsense in WSJ. The Saudi investor had about 10% of the stock owned outside the Murdoch family. Now he has half that, meaning less support for Rupert and sons. The sons only got a 66% approval for continuing on the bard in October, 2011. Without the foreign investor voting, that will probably drop to 60% or much less if James gets hammered again. Rupert got 86% approval as chairman a the 2011 meeting. That will go down simply due to the loss of votes from friendly foreign shareholders. And there is the Cristian Brothers investment fund, which wants Rupert out as chairman. In retrospect, I’ll bet the brothers move is seen as the tipping point.
But it’s much worse than this. I need to do a chart on what News Corp loses over five years if it loses BSkyB. It’s astonishing, truly. If that goes before the next shareholder meeting, adios all the Murdochs. It will prove he shareholder suit also.
Thanks for posting this Tina!
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We’re supposed to believe the spin that it’s hard to track foreign investors. What’s the deal? Does News Corp issue bearer bonds? Did the investors leave out the address field? Doesn’t their investor relations group have a mailing list for shareholders?
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I found it interesting how much foreign investment increased since 2007. I figured those numbers would be the easiest to prove since they have to be on record somewhere. I wonder exactly when those numbers went up, before or after the first act started.
Always keep an open mind and a compassionate heart. ~ Phil Jackson
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