Rupert Murdoch's grip on the global media empire he founded was under direct threat last night as the first moves began in America to oust him as chairman of News Corp.
The 81-year-old's company faces investigations for negligence after a report by the House of Commons' Culture, Media and Sport Committee declared the mogul "unfit" to run an international business and described him as overseeing a culture of "wilful blindness".
The damning verdict also increased the pressure on News Corp's 39 per cent shareholding in the British broadcaster BSkyB, with the media regulator Ofcom saying that it will take the MPs' findings into consideration as part of its review into whether the conglomerate is a "fit and proper" body to hold a broadcasting licence.
Rupert Murdoch was "not a fit person to exercise the stewardship of a major international company", the report concluded, in a judgement that divided the MPs on the committee. He had "turned a blind eye and exhibited wilful blindness", they said. The wrongdoing at News International was the symptom of a "culture [that] permeated from the top", and "speaks volumes about lack of effective corporate governance", MPs said.
His son James, who resigned earlier this year from control of the company's European operations, was guilty of "wilful ignorance".
The repeated allegations from the MPs of "wilful blindness" and "wilful ignorance" against the the Murdochs and directors of News International appeared designed to raise alarm in America by echoing legal terms that suggest criminal liability for corporate wrongdoing.
Three of the Murdochs' once-loyal lieutenants – the News of the World lawyer Tom Crone, the paper's former editor Colin Myler and Les Hinton, often referred to as Murdoch Senior's "consigliere", were singled out in the report as having been complicit in a cover-up.
News Corp is already facing legal problems in the US, including a potential investigation under the Foreign Corrupt Practices Act, arising from the actions of journalists and executives in its UK newspaper arm. Change to Win, a union advisory group for US pension funds, joined calls from some shareholders for Mr Murdoch to step down.
Mr Myler said in a statement the conclusions of the committee had been affected by the "fragmented picture" from evidence given by witnesses. Responding to the renewed pressure on the board in New York that followed the report's verdict, News Corp said "hard truths" had emerged. The company said it regretted the committee's analysis and branded some findings "unjustified and highly partisan".Reuse content