Tue, July 19, 2011
World > Europe > News Corp. in hacking scandal

Britain: Murdoch dynasty in doubt(2)

2011-07-19 03:40:37 GMT2011-07-19 11:40:37(Beijing Time)  SINA.com

In 2001, a former wife of Rupert Murdoch predicted that there would be heartache among her children — James, Lachlan and Elisabeth — when the time came to choose his successor. At the time, Anna Murdoch Mann told the Australian Women's Weekly magazine that she would prefer that none of her children took the reins.

"I think they're all so good that they could do whatever they wanted, really," she said. "But I think there's going to be a lot of heartbreak and hardship with this. There's been such a lot of pressure that they needn't have had at their age."

The accusations of phone hacking and police bribery by journalists at the News of the World reached into the elder Murdoch's inner circle with the arrest Sunday of Rebekah Brooks, former head of his British newspaper unit.

James Murdoch did not directly oversee News of the World, where the phone hacking of celebrities and others allegedly occurred, but he approved payments to some of the paper's most prominent hacking victims, including 700,000 pounds ($1.1 million) to Professional Footballers' Association chief Gordon Taylor.

He said he "did not have a complete picture" when he approved the payouts. Still, commentators view his position as fragile because of questions about whether the criminal investigation will go higher up the chain of command at News Corp. Additionally, the company could be liable under the U.S. Foreign Corrupt Practices Act, which bars American companies from bribing foreign officials for business.

Journalists at the News of the World hacked the voice mail of mobile telephones in an attempt to get information for stories that would help sell newspapers, and allegedly paid police for information that could also be used in the production of news reports.

Louise Cooper, an analyst in the London office of the brokerage BGC Partners, described years of speculation about who would take control after Rupert Murdoch as a perpetual process of "one's up, another one's down" that focuses on the tycoon's children. In the end, she said, it is the patriarch's decision.

"He still has absolute control over that company," Cooper said. She said that barring further revelations about the involvement of James Murdoch in the scandal, "it's difficult to write him off completely."

Rupert Murdoch controls News Corp. through a family trust that holds 40 percent of the company's Class B voting shares. The succession question has centered on James, Elisabeth and Lachlan, children by Murdoch's second marriage to Anna Torv, later Anna Murdoch Mann after she remarried.

Elisabeth is married to prominent British public relations executive Matthew Freud. She resigned as managing director of British Sky Broadcasting, a lucrative satellite broadcaster in which News Corp. is the biggest shareholder, in 2000 to go her own way. This month, Murdoch dropped a bid to take full control of BSkyB in response to the uproar over phone hacking.

Lachlan Murdoch, once seen as the heir apparent, had been elevated to deputy chief operating officer of News Corp. by the time he quit in 2005 to go back to Australia.

That left James as the expected heir. He has been chairman and CEO of the company's European and Asian operations since 2007, and later became deputy chief operating officer of News Corp.

Rupert Murdoch has another daughter, Prudence, from his first marriage to Patricia Booker; she is married to Alasdair MacLeod, who stepped down last year after 20 years as a News Corp. executive, most recently as managing director of the Australian newspapers.

Murdoch also has two daughters, 9-year-old Grace and 7-year-old Chloe, with his third wife, Wendi Deng. She was a junior News Corp. executive in Hong Kong before marrying Murdoch in 1999 at the age of 32. Her name has occasionally cropped up in succession speculation in the past.

(Agencies)

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