Defiant Murdoch sees off bids to loosen his power

 

Rupert Murdoch has told investors that if they don't like the way that he does business, amid continuing fallout from the phone-hacking affair, then they simply shouldn't bother owning shares in his media companies.

The defiant message came as the 81-year-old tycoon faced down a series of attempts to loosen his family's grip on the reins of power at News Corporation during the annual general meeting of the company in Los Angeles last night.

It also followed a report in the Financial Times that roughly £7m of company funds were given to Rebekah Brooks when she resigned as chief executive of News International, the company's UK newspaper arm, last year amid phone-hacking revelations.

"There are plenty of media stocks to buy," Mr Murdoch bluntly declared yesterday. "When you buy the stock, you know what the company is, if you read the articles. If you don't like it, then don't buy the stock."

The combative remarks came after Mr Murdoch announced that he'd successfully defeated motions by dissident shareholders to remove him as chairman of the firm in favour of an individual better equipped to deal with what they have called the "lax ethical culture" laid bare by News Corporation's "still emerging scandals."

Mr Murdoch also managed to see-off an attempt to reform the company's dual-class share structure, which allows his family to control roughly 40 per cent of voting stock in News Corporation while only actually owning about 13 per cent of the company's shares.

Yesterday's AGM was a largely subdued occasion compared to last year's, when shareholders who had recently suffered the closure of the News of the World, along with the costly abandonment of a takeover bid for BSkyB, repeatedly criticised Mr Murdoch from the floor and accused him of heading up a "criminal conspiracy".

Activist shareholders at the half-empty Zanuck Theatre in Hollywood failed to ask Mr Murdoch about the payout to Ms Brooks, and why he last week he saw fit to describe victims of phone hacking as "scumbag celebrities."

Although pension funds, investment houses and shareholder bodies have called for reforms of News Corporation, their anger has been blunted by the fact that the firm's shares have risen by almost 45 per cent in the past year.

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