Murdoch’s most humble day as protester attacks

The Murdochs, Rupert and James, spent Tuesday afternoon appearing before the Department of Media Culture and Sport Select Committee, answering questions about the phone hacking scandal at News International. At one point late in the session it had to be suspended when a protester tried to attack Rupert Murdoch – with a custard pie. The young protester was bundled out – there will doubtless be another inquiry into how he got in.

Early in the process, Murdoch Snr had declared “this is the most humble day of my life.” For News Corp and BSkyB investors watching around the world, the nature of the performance will have been almost as important as any new admissions of wrong doing.

As you might expect James was the ultimate corporate performer, thanking inquisitors for their questions and saying he was determined to answer transparently, however, he then, more often than not, claimed he was either not there at the time or had no direct knowledge because ‘it was a management issue’. The MPs were unimpressed that on several occasions he had not, despite current circumstances, familiarised himself with who had made decisions when, and why.

Murdoch Snr was unapologetic that he did not know what was going on, stating repeatedly that the News of the World was less than one per cent of the company. However, he also allowed that he did speak directly the editor of paper ‘probably once a month’. He said we would simply ask them ‘What’s up?’ But, he said, they never mentioned that the paper had paid over £1.5 million in out of court settlements to civil litigants – including the ‘PR guru’ Max Clifford – to settle phone hacking claims, after an editor on the paper had been jailed for the offences, and neither did anyone else in News International management.

One member of the committee asked James Murdoch; “do you know the meaning of the term ‘Wilful Blindness’?” James did not, so it was explained it was now a well known legal term in the US first used in the Enron case and means that deliberately avoiding knowledge of wrong doing, is no defence for lack of knowledge of wrong doing. Rupert interjected that he had heard of the term and said they were definitely not guilty of it.

Investors and regulators will make their own minds up whether the senior management of News Corp’s apparent continuing lack of grasp about the incidents that have lead to criminal convictions, large civil settlements, the loss of the BSkyB deal and billions wiped from the value of News Corp, is reasonable and acceptable.

 

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