Pressure set to mount on James Murdoch

Fri Mar 9, 2012 11:47am EST
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By Paul Sandle and Chris Vellacott

LONDON (Reuters) - The Murdoch family's grip on Britain's BSkyB is coming under increased scrutiny, with some shareholders concerned that an imminent report from lawmakers will increase the pressure on James Murdoch to give up his chairmanship of the satellite broadcaster.

The report from the parliamentary committee investigating the phone hacking scandal has been delayed but is now expected before Easter.

It will come hot on the heels of news that UK broadcast regulator Ofcom has intensified its investigation into whether BSkyB's links with Murdoch and News Corp make it fit to hold a broadcasting license.

The Ofcom investigation, which is open ended, is examining mounting evidence of wrongdoing at Rupert Murdoch's British newspapers and whether it impinges on BSkyB as a "fit and proper" holder of a license.

It will increase the scrutiny on James Murdoch's position at the satellite company, and could eventually lead to News Corp selling down its 39.1 percent stake in a company it wanted to buy outright last summer.

One UK-based top 40 BSkyB institutional shareholder, who asked not to be named, said it was worried that the focus on James Murdoch could distract BSkyB's management, and it could set up an unwanted argument with Ofcom in what is a strongly regulated industry.

"It is a problem if you are being figure-headed by someone who does not have a good relationship with the regulator," the shareholder told Reuters on Friday.

"That is a business risk. That's the concern we've had."   Continued...

BSkyB Chairman James Murdoch, who is also head of News Corp in Europe and Asia, walks off stage after a rehearsal for his James MacTaggert Memorial lecture as part of the Media Guardian Edinburgh International TV Festival in Edinburgh, Scotland, August 28, 2009. Picture taken August 28, 2009. REUTERS/David Moir