Murdoch to testify at fraud trial

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Rupert Murdoch heads an all-star cast of current and former News International staff to be put on the stand in a multi-million fraud trial in the High Court next year.

This weekend, the media giant bitterly attacked as an "extortion campaign", an Israeli tax investigation into an alleged pounds 100m of tax evasion.

The inquiry, it says, has been inspired by a former executive, Michael Clinger, in a propaganda war over the alleged skimming of pounds 20m of profits from the supply of Sky TV smartcards.

They threaten, nonetheless, to derail a pounds 400m flotation of News Digital Systems, its satellite technology arm, before Christmas.

Mr Clinger denied the claims but vowed to heap on the embarrassment. "Everybody's going to be subpoenaed. Our list will include Murdoch, Sam Chisholm and Andrew Neil. But Rupert is certainly at the top of the list," he said.

The group has been rocked by innuendo since inspectors raided Jerusalem- based News Datacom Research recently. Claims have included illegal exports, misuse of grants, and secret manufacture in Israel, all of which it denies.

NDR provides the group's satellite encryption know-how but is part of a larger UK-managed operation, which sources smartcards from overseas and programmes them here.

The group said it only carried out research and development, with expenses of $15m (pounds 9.3m) last year, and paid taxes on its profits. Because of the alleged fraud, however, the wider smart-card operation has been loss-making until this year, it added.

Last week, the Israelis dismissed a report that an arrest warrant had been issued for Mr Murdoch himself.

Full story, page 3

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