News Corp today agreed a $139m (£91m) settlement with its own shareholders over a lawsuit claiming that its board of directors repeatedly put the interests of Rupert Murdoch and his family ahead of the company on issues including the phone hacking scandal.
In an unusual corporate legal claim, Mr Murdoch's media and entertainment giant agreed to pay itself the £90m from the proceeds of insurance policies held by the directors, including Mr Murdoch and his two sons, who had been named in the suit.
News Corp said it had admitted no wrongdoing to settle the proceedings, which had alleged that 16 of the company's current and former directors had "refused to investigate known illegal conduct" linked to newsgathering by the News of the World .
To settle the claim, the company has agreed to tightened corporate governance procedures, including an anonymous whistleblowing hotline and a requirement that the company, which is soon to be split into an entertainment and a publishing arm, declare all political donations made on its behalf.
In a statement, News Corp said: "We are pleased to have resolved this matter. The agreement reflects the important steps News Corp has taken over the last year to strengthen our corporate governance and compliance structure and we have committed to building on those efforts."
The lawsuit, which was brought on behalf of shareholders including the union-owned Amalgamated Bank and a workers' pension fund, also challenged the decision by News Corp to buy the television production company Shine, owned by Murdoch's daughter Elisabeth, for $675m in 2011. The claim alleged the deal was a case of "nepotism".
In addition, the claim stated: "This case arises because News Corp for years engaged in highly improper (and at times illegal) conduct around the world without any board intervention, resulting in severe harm to the company."
The settlement, thought to be the highest of its kind, will have to be ratified by a American court before it is finalised.Reuse content