Global media tycoon Rupert Murdoch is not a "fit and proper person" to run a major international company, British lawmakers investigating phone hacking at his tabloid the News of the World reported Tuesday. The ruling could prompt British regulators to force him to sell his controlling stake in British Sky Broadcasting, a significant part of his media empire.
This one's pretty big, folks. It means whether or not old Rupert here was actually the fellow behind the phone hacking nonsense, British lawmakers have decided that he should be held responsible for it. Bloomberg News is even more blunt:
Murdoch “turned a blind eye and exhibited willful blindness to what was going on in his companies and publications,” the House of Commons Culture, Media and Sport Committee said in a report published in London today. “This culture, we consider, permeated from the top throughout the organization and speaks volumes about the lack of effective corporate governance at News Corp.”
Ouch. The question now is the level of punishment that Murdoch and News Corp will receive. It could be nothing. It could be having to divest itself of all B Sky B holdings. We'll see. But this is the first real blow to Murdoch we've seen from the fallout of the phone hacking, and I'm betting it won't be the last. The Guardian article contains the full text of the Select Committee report and opens with this:
Labour MPs and the sole Liberal Democrat on the committee, Adrian Sanders, voted together in a bloc of six against the five Conservatives to insert the criticisms of Rupert Murdoch and toughen up the remarks about his son James. But the MPs were united in their criticism of other former News International employees.
The cross-party group of MPs said that Les Hinton, the former executive chairman of News International, was "complicit" in a cover-up at the newspaper group, and that Colin Myler, former editor of the News of the World, and the paper's ex-head of legal, Tom Crone, deliberately withheld crucial information and answered questions falsely. All three were accused of misleading parliament by the culture select committee.
Interesting breakdown of the votes there. We'll see how this treacle rolls downhill.