Murdoch's News Corp. Sued By Shareholders For 'Unfairly' Agreeing To Buy Daughter's Firm

(Reuters) - The board of News Corp (NWSA.O) has been sued by shareholders for agreeing to buy a business owned by Chairman Rupert Murdoch's daughter for about $675 million, according to a lawsuit filed on Wednesday.

A trustee for several retirement funds said the board of News Corp approved the "unfairly" priced deal without questioning or challenging the elder Murdoch, who founded the company and is also chief executive.

News Corp declined to comment.

The chairman of News Corp said he expected his daughter Elisabeth to join his company's board after buying her Shine Group television production business.

The deal raised new questions about succession at News Corp, which owns the broadcaster Fox and publishes the Wall Street Journal.

"In short, Murdoch is causing News Corp to pay $675 million for nepotism," said the lawsuit, which was filed in Delaware's Chancery Court.

"In addition to larding the executive ranks of the company with his offspring, Murdoch constantly engages in transactions designed to benefit family members," said the lawsuit by Amalgamated Bank, a trustee for several investment funds holding more than 1 million News Corp shares.

The lawsuit was also joined by the Central Laborers Pension Fund.

The lawsuit seeks damages and a declaration the board breached their fiduciary duty to shareholders.

The case is Amalagamated Bank et al v K. Rupert Murdoch et al, Delaware Chancery Court, No. 6285.

(Reporting by Tom Hals; Editing by Bernard Orr)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Carl Caroli]

03:51 PM on 03/18/2011

It's good to be king.

[AG creative]

02:56 PM on 03/18/2011

You know... it's not every day that you hear the word: 'nepotism'.

Kind of brings you back to simpler days.

[StopMakingSense2]

02:26 PM on 03/18/2011

What about crimes against humanity? He's a conservative, nepotism is expected. They are all about competition except when it come to their enablers...

[edejan]

01:27 PM on 03/18/2011

Hahaha....this makes my day. Even if nothing comes of it, it may be a first chink in Murdoch's stronghold.

[UnknownSolider]

07:43 AM on 03/18/2011

Why are people acting like this is some new thing? Would Bush had become President if not for his legacy? What about the Kennedy's? Would Eli Manning have the been the first overall pick in the NFL draft if not for his dad?

All of these point directly to what the Founders did not want which is an inherited aristocracy

[SweetTart]

03:14 AM on 03/18/2011

Infighting among the mongrels - please, continue.

[janjiam]

02:39 AM on 03/18/2011

The Murdochs, Australia's most shameful export.

Sorry everyone. At least this time some of his shareholders are standing up to him.

[zunklives]

02:23 AM on 03/18/2011

If you are in business with the devil, do you really expect to not get burnt? see that nose on your face?

[Arts4u]

01:36 AM on 03/18/2011

Best news of the day!

[yogajan]

12:31 AM on 03/18/2011

They should be sued for pretending to know anything about journalism.

[irochfpst]

11:58 PM on 03/17/2011

this is what happens when a stupid people becomes wealthy. some people have no ethics and it shows up in their business practices. need i say more?

[BlexClex]

11:19 PM on 03/17/2011

PFFFFT. They should be sued BY the WORLD for crimes against humanity, hate speech, slander, lies, libel, and WAR CRIMES. Murdoch belongs in a sanitarium!!!!!!

[Democrat in the South]

11:22 PM on 03/17/2011

#3

[Sweettunia]

11:23 PM on 03/17/2011

Under a sanitarium, please.

[Bushwhacked]

07:02 PM on 03/17/2011

Send Rupert Murdoch, his daughter and, Roger Ailes and the Koch brothers directly to the nuclear reactors in Japan for clean up duty.

[DG3]

10:36 PM on 03/17/2011

I guess being a more of a moderate than a liberal makes me less of a hard-core partisan for the Dems.

As much as I can't stand the people you listed, saying you want them to all get radiation and die is just making you as bad as they are.

Rise above the hate.

[zunklives]

02:21 AM on 03/18/2011

I agree that I would never wish death apon anyone, but if you have watched fox news in the last few days, they claim the japan crisis has been overblown(oreilly talking about nukes) and furthermore fox has also went on to say that these type of things would never ever happen if california was hit like japan, so that being said, maybe oreilly would be a better candidate for cleanup, in diachi

[philprism]

03:55 AM on 03/18/2011

I agree, that is the path of true madness. You really do have to look carefully at why Fox appeals to many Americans, Murdoch is serving up what a lot of people want to hear. Figure out why, much more constructive than throwing hate around

So long as the Murdoch money pump puts money in shareholders pockets he will do just fine. As you can see even they know when he has gone too far and running News Corp like a grocer in a corner shop is not on.

[mariusvinchi]

06:29 PM on 03/17/2011

Hmmm....So, JP Morgan Chase conducted the "financial assessment" that set a value on the Shine Group. Rupert Murdoch and Jamie Dimon are welded together at the hip. Jamie Dimon oversaw the "assessment".......1+1 = $675 million....