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Shareholders sue News Corp over hacking scandal

A group of News Corporation shareholders are suing the media conglomerate over what they claim are large-scale governance failures surrounding the British phone-hacking case.

News Corp CEO Rupert Murdoch rolls down the window of the vehicle taking him to his apartment in St James's, central London to enable photographers to take pictures Sunday July 10, 2011.
News Corp CEO Rupert Murdoch rolls down the window of the vehicle taking him to his apartment in St James's, central London to enable photographers to take pictures Sunday July 10, 2011.
Image: AP Photo/Pool

A GROUP OF News Corporation shareholders have sued the media conglomerate over a phone-hacking scandal at its now-closed News of the World tabloid in London.

The lawsuit accuses News Corp of large-scale governance failures surrounding the British hacking case. News of the World employees have been accused of hacking into the phone of a missing 13-year-old Milly Dowler, who was later found murdered, as well as those of other crime victims and the families of soldiers killed in duty.

The lawsuit was filed late Friday in Delaware Chancery Court by shareholders led by Amalgamated Bank. Several municipal and union pension funds joined in the lawsuit. The shareholders own less than 1 percent of News Corp’s stock combined.

The lawsuit is part of an amended complaint that was filed this year. The shareholders are also challenging News Corp’s acquisition of Shine Group Ltd, founded by the daughter of News Corp Chairman and CEO Rupert Murdoch. The suit claims that Rupert Murdoch “habitually uses News Corp to enrich himself and his family members at the Company’s and its public shareholders’ expense.”

James Dix, an analyst with Wedbush Securities, said such lawsuits are common any time a company’s stock price drops.

News Corp’s stock dropped $1.26 (€0.89), or 7.5 per cent, to $15.49 (€11.04) in afternoon trading Monday. The stock is down more than 12 percent since June 30 as the fallout from the scandal has broadened.

News Corp didn’t return messages left by the AP on Monday morning for comment.

- AP

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