News Corp. Investors Add Hacking Scandal to Lawsuit

NEW YORK: The News Corp. institutional investors suing the company over its acquisition of the Shine Group have submitted a revised complaint that includes the News of the World scandal, citing it as another example of "improper conduct."

The suit was filed in Delaware Chancery Court by Amalgamated Bank, Central Laborers Pension Fund and New Orleans Employees’ Retirement System. It alleges: "Rupert Murdoch—News Corp.’s founder, chairman, chief executive officer and controlling shareholder—habitually uses News Corp. to enrich himself and his family members at the company’s and its public shareholders’ expense. Plaintiffs bring this shareholder derivative and class action because recent self-interested transactions and revelations about News Corp.’s operations giving rise to this action are the proverbial straws that break the camel’s back."

The suit was first filed regarding News Corp.’s acquisition of Elisabeth Murdoch’s Shine Group. The revised complaint filed today adds the News of the World phone-hacking scandal to the plaintiffs’ list of complaints. The incidents that ultimately led to News of the World‘s closure at the weekend "should not have taken years to uncover and stop," the suit contends. "These revelations show a culture run amuck within News Corp. and a Board that provides no effective review or oversight."

The suit adds, "by failing to take action to investigate, control and limit the fallout from the hacking scandal, the Board breached its duty and exposed the company to billions in losses that could have otherwise been avoided."