By Kevin McCauley
A shareholder lawsuit filed March 16 in Delaware Chancery Court charges News Corp. with nepotism connected to its $675M deal to acquire U.K.’s Shine Group, which is headed by Elizabeth Murdoch, daughter of the media combine’s CEO Rupert Murdoch.
Amalgamated Bank of New York and the Central Laborers Pension Fund charge that Murdoch uses the $33B company as a “family candy store.”
The suit alleges that Murdoch loads the “executive ranks with his offspring” and “engages in transactions designed to benefit family members.”
According to the suit: “Although the transaction makes little or no business sense for News Corp. and is far above a fair and independent, a disinterested third-party would pay for Shine, it is unsurprising that that transaction was approved by the News Corp. board.”
The complaint calls the Shine deal another attempt to further the “selfish” interests of News Corp.’s chief.
The investors seek unspecified damages and want to inspect the financial documents associated with the Shine deal.
News Corp says the lawsuit is completely without merit.
The company announced the Shine deal in February. Chase Carey, COO of News Corp., called Shine a “leader in the global television production business with a proven track record of developing hit shows and new formats worldwide.”
Elizabeth Murdoch is expected to join the board of News Corp, if the acquisition is completed.
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