A group of US union and pension fund investors in News Corp, led by New York-based Amalgamated Bank, has lodged a legal complaint against the media giant’s board, including Rupert Murdoch, accusing it of ignoring misconduct by subsidiaries, including conditional access provider NDS.
Linking the phone hacking scandal in the UK to other News Corp activities, the group, which has filed a suit against News Corp in a Delaware court, cited accusations dating back a number of years that News Corp subsidiary News America Marketing (NAM) and News Corp-backed conditional access unit NDS had hacked into business plans and computers and had “violated the law through a wide range of anti-competitive behaviour”.
The latest filing is an amendment to a complaint filed in March, which News Corp has already moved to dismiss. The group has not said how much they are seeking. News Corp has not commented on the latest filing.
The group said that while NAM had been accused of “illegally hacking a competitor’s password-protected website on eleven separate occasions over a several month period”, resulting in a payout by News Corp to three competitors totalling US$650 million (€475 million), NDS had been “accused of illegally extracting software code from competitors’ smartcards and posting the information on the internet”, allowing hackers to “create counterfeit cards that could be used to illegally intercept satellite television protected by competitors’ smartcards”, according to the filing. This is a reference to the lawsuits filed some years ago by US DTH provider EchoStar and Vivendi.
The complainants alleged that as several News Corp board members sat on the board of NDS and NAM, “their knowledge of this malfeance is clear”.
The Amalgamated Bank-led group accuse News Corp’s board of “utter failure to curb Murdoch’s use of the Company’s money to pursue his own agenda” and of consistently placing Murdoch’s interests ahead of News Corp’s public shareholders. Other examples cited in the complaint include the board’s endorsement of plans to repurchase shares from John Malone, protecting Murdoch’s control of News Corp at the expense of giving up on profits in US pay TV service DirecTV , and News Corp’s recent purchase of Elisabeth Murdoch’s production company Shine.
The institutional investors behind the complaint own about one million shares of common stock in News Corp.