Media is abuzz with reports of rift between British pay-TV giant BSkyB owner Rupert Murdoch and his son James. If reports are to be believed the phone hacking scandal was the most serious episode to test a father-son relationship that has whithered away over the past few years.
The rift is said to have stemmed from clash of the ideologies of the father-son duo which has deepend to the extent that at times they don't even speak to each other.
In the meanwhile, a growing number of News Corp shareholders with voting rights are considering sending a strong message of discontent to Rupert Murdoch by voting against several long-standing board members including his sons James and Lachlan.
In the run up to Friday's annual general meeting, holders of News Corp B stock including normally compliant supporters of Murdoch and his family, are closely examining recommendations by proxy advisory groups ISS and Glass Lewis to vote out as many as 13 of the media conglomerate's current 15 directors.
"Ninety-nine % of the time we vote with Glass Lewis on these kind of matters," said Donald Yacktman, president and co-chief investment officer of Yacktman Asset Management Co in Austin, Texas referring to the proxy advisory firm.
Glass Lewis specifically recommended their fund clients withhold their votes for six directors including James and Lachlan Murdoch along with other News Corp insiders David Devoe, chief financial officer, and Arthur Siskind, a senior adviser to Murdoch.
While most major shareholders declined to comment publicly on their specific voting strategy, several said privately that the proxy advisory groups' comments would be an important factor in their decision. It follows the high profile and damaging fallout from the phone hacking scandal at News Corp's now defunct UK paper News of the World.
The scandal has rocked the parent of Fox TV, Wall Street Journal and The Sun in the UK, and raised serious questions about the leadership of its News Corp founder Rupert Murdoch, 80. It has also undermined an unspoken succession plan once thought to involve one of his children.
After the furor of the last few months, this year's shareholder meeting is being more carefully stage-managed than in recent years, with a strict and limited number of shareholders only able to attend the meeting at the Zanuck Theatre on the Fox Studios lot in Hollywood by using News Corp-provided transportation.
Simon Burge, Chief Investment Officer at Above the Index Asset Management, a top 20 investor in News Corp's Australian shares (NWS.O), said the fund is leaning towards voting against James, Lachlan and Rupert Murdoch.
with Reuters input