Pressure set to mount on Murdoch

Pressure set to mount on Murdoch

The Murdoch family’s grip on Britain’s BSkyB is weakening, with an imminent report from lawmakers set to pile even more pressure on James Murdoch to give up his chairmanship of the 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 per cent 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.