MUMBAI: Decks have been cleared for Rupert Murdoch?s global media empire to be split into two companies with the high growth media & entertainment business being separated from the sluggish publishing business.

News Corporation?s Board authorised management to explore this separation after a Board meeting yesterday.

The move, aimed at increasing operational flexibility, will see creation of two distinctly public trading companies which would allow News Corp shareholders to hold interests in a publishing company, consisting of publishing assets and a new digital education group, and a global media and entertainment company.

Upon closing of the proposed transaction, Rupert Murdoch would serve as chairman of both companies and CEO of the media and entertainment company. Chase Carey would serve as President and COO of the media and entertainment company.

Over the next several months, the company will assemble management teams and Boards of Directors for both businesses, News Corp said in a statement.

Murdoch?s decision not to head the new publishing business has sparked speculation that he was setting the stage for the return of his eldest son Lachlan Murdoch to the company.

The separation is expected to be completed in approximately 12 months. Management is developing detailed plans for the Board?s further consideration and final approval. To execute the transaction requires further work on structure, management, governance, and other significant matters.

After receiving final approval of the Board of Directors, News Corporation will convene a special shareholder meeting to consider the transaction. This meeting is not expected to take place until the first half of calendar 2013.

"There is much work to be done, but our Board and I believe that this new corporate structure we are pursuing would accelerate News Corporation?s businesses to grow to new heights, and enable each company and its divisions to recognize their full potential - and unlock even greater long-term shareholder value," said News Corporation Chairman and CEO Rupert Murdoch.

"News Corporation?s 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognize that over the years, News Corporation?s broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe.

I am 100 percent committed to the future of both the publishing and media and entertainment businesses and, if the Board ultimately approves a separation, I would serve as Chairman of both companies."

The proposed transaction would create global category leaders in both publishing and entertainment: a publishing company, which would consist of News Corporation?s newspapers and information businesses in the U.S., U.K., and Australia, the company?s leading book publishing brands, its integrated marketing services company, its digital education group, as well as its other assets in Australia; and a global media and entertainment company, which would encompass News Corporation?s broadcast and worldwide cable networks, leading film and television production studios, television stations and highly successful pay-TV businesses in Europe and India.

The new global media and entertainment company would consist of News Corporation?s highly-profitable cable and television assets, filmed entertainment, and direct satellite broadcasting businesses, including Fox Broadcasting, Twentieth Century Fox Film, Twentieth Century Fox Television, Fox Sports, Fox International Channels, Fox News Channel, Fox Business Network, FX, Star, the National Geographic Channels, Shine Group, Fox Television Stations, BSkyB, Sky Italia and Sky Deutschland.

The publishing company includes brands like Dow Jones, The Wall Street Journal, Dow Jones Newswires, HarperCollins, The New York Post, and The Daily, as well as offer the rich diversity of assets in Australia, including leading brands such as The Australian, The Herald Sun, The Daily Telegraph and The Courier Mail. In addition, the Company would include The Times, The Sun, The Sunday Times, as well as News Corporation?s integrated marketing services group and its ground-breaking digital education group, including Wireless Generation.

Upon closing of the proposed transaction, News Corporation?s shareholders would receive one share of common stock in the new company for each same class News Corporation share currently held. Following the separation, each company would maintain two classes of common stock: Class A Common and Class B Common Voting Shares.

In addition to shareholder approval, the completion of the separation will also be subject to receipt of regulatory approvals, opinions from tax counsel and favorable rulings from certain tax jurisdictions regarding the tax-free nature of the transaction to the Company and to its shareholders, further due diligence as appropriate, and the filing and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission.

MUMBAI: Rupert Murdoch-owned News Corporation plans to split the business into two verticals separating film & television from its publishing business.

Although the final decision has not been taken, it is believed that News Corp chairman Rupert Murdoch, who in the past resisted calls for split in the business, has warmed up to the idea.

The move comes in the background of phone hacking scandal at the company?s UK publishing business which led to the closure of News of the World tabloid and reorganisation of the top level with James Murdoch stepping down from the News International board. 

The scandal, which is being probed by local authorities, prompted News Corp. to abandon plans to increase its shareholding in UK?s BSkyB, in which it holds 39 per cent stake.

UK?s media watchdog Ofcom is also investigating whether James Murdoch, who had to resign from BSkyB board in April, is ?fit and proper? person to hold broadcasting license.

News Corp?s film and entertainment business includes Fox News Channel and Fox Business Network, Star Television, Fox Broadcasting Company, BSkyB and 20th Century Fox. 

The group?s publishing assets include The Wall Street Journal, the Times of London and the Australian newspaper, as well as HarperCollins, the book publishing company which has a joint venture with India Today Group for the Indian market.

The move, if fructifies, will not change Murdoch family?s control of the two businesses. The family exercises effective control over the company through 40 per cent voting stake.

The conglomerate?s outside investors are believed to be in favour of a split more so since television and film assets contribute three-quarters of the $25.34 billion in revenue for the first nine months of the fiscal year.

News Corp.?s chief operating officer Chase Carey, who is believed to be a key proponent of spinning off publishing biz, had in May said that the management and the board had discussed the idea but didn?t have plans to pursue it. 

MUMBAI: In a major setback for Rupert Murdoch, the Culture, Media and Sport Committee of the British Parliament which is probing the phone hacking scandal at News International has ruled that the News Corp chief is ?unfit? to lead the company.

The committee in its report to the Parliament accused the media tycoon of "wilful blindness" by deliberately covering up evidence of phone hacking at his UK publishing business which eventually led to the closure of 168 year old News of the World news paper.

"On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications.

"This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company," the committe said in the conclusion of its report.

Rupert Murdoch and his son James Murdoch had last week laid the blame of phone hacking on subordinates, insisting that they were unaware of the wrong doing at the News of the World.

According to reports, the verdict has divided political parties in Britian with Labour Party panel member Tom Watson saying the decision had not been unanimous, and Conservative lawmaker Louise Mensch saying the split had been along party lines.

In a press statement, News Corp.regretted the committee?s tough language terming them as regretful and partisan.

"Hard truths have emerged from the Select Committee Report: that there was serious wrongdoing at the News of the World; that our response to the wrongdoing was too slow and too defensive; and that some of our employees misled the Select Committee in 2009," the statement read.

"News Corporation regrets, however, that the Select Committee?s analysis of the factual record was followed by some commentary that we, and indeed several members of the committee, consider unjustified and highly partisan. These remarks divided the members along party lines.

"We have already confronted and have acted on the failings documented in the Report: we have conducted internal reviews of operations at newspapers in the United Kingdom and indeed around the world, far beyond anything asked of us by the Metropolitan Police; we have volunteered any evidence of apparent wrongdoing to the authorities; and, we have instituted sweeping changes in our internal controls and our compliance programs on a world-wide basis, to help ensure that nothing like this ever happens again anywhere at News Corporation.

"As we move forward, our goal is to make certain that in every corner of the globe, our company acts in a manner of which our 50,000 employees and hundreds of thousands of shareholders can be justly proud."

Meanwhile, satellite broadcaster BSkyB, which is part owned by News Corp, has asserted that is a ?fit and proper? licence holder and was engaging with the regulator Ofcom in its assessment of BSkyB?s suitability.

Ofcom is reviewing whether Rupert and James Murdoch are ?fit and proper? to hold a broadcast licence following charges of phone hacking.

MUMBAI: James Murdoch, the scion of media empire News Corporation, has distanced himself from the phone hacking scandal at UK publishing business News International by putting the blame on his subordinates who he alleged misled him on the goings-on at the now defunct News of the World tabloid.

Speaking under oath at Lord Justice Brian Leveson?s inquiry into media ethics, Murdoch alleged that the tabloid?s then-editor Colin Myler and the company?s former in-house lawyer Tom Crone misled him about the illegal activities at the tabloid.

According to Associated Press, Leveson asked Murdoch: "Can you think of a reason why Mr. Myler or Mr. Crone should keep this information from you? Was your relationship with them such that they may think: ?Well we needn?t bother him with that? or ?We better keep it from it because he?ll ask to cut out the cancer??"

"That must be it," Murdoch said. "I would say: ?Cut out the cancer,? and there was some desire to not do that."

The News Corp has been at the centre of scandal ever since it came to light that reporters at the News of the World hacked into the phones of hundreds of high-profile people, including a teenage murder victim.

The emergence of the scandal led News International to shut 168 year old News of the World on 7 July last year leading to a loss of 200 jobs.

For News Corp the implications of hacking scandal ran beyond News International as the move to up stake in UK broadcasting business BSkyB proved futile even after it got culture minister?s Jeremy Hunt to gobble up the remaining 61 per cent of Sky for ?8 billion.

Murdoch also denied the charge The Sun newspaper endorsed the Tories? election bid saying, "I would never have made that kind of a crass calculation," Murdoch said. "It just wouldn?t occur to me".

Rupert Murdoch, who is still chairman and chief executive of News International?s parent company News Corp, is scheduled to appear before the inquiry on Wednesday, AP reported.

Earlier, James Murdoch had to step down as the chairman of BSkyB, while continuing to remain on BSkyB?s board as a non-executive director. In February the Jr Murdoch stepped down as executive chairman of News International.

To firewall him from the likely impact of the scandal, News Corp had relocated him to New York headquarters as the deputy COO of the parent company.

Jr. Murdoch had last month further cut off all remaining ties with News International, the UK publishing business of News Corp, by resigning from the boards of Times Newspaper Holdings; News Corp Investments; and News International Publishers Limited.

The British media regulator Ofcom is already evaluating whether James Murdoch is ?fit and proper? to hold a broadcast licence on behalf of BSkyB. The Culture, Media and Sport Select Committee?s report into allegations of phone hacking by the end of the month.

Meanwhile, in a related development the judge Brian Leveson said British Sky Broadcasting?s Sky News channel breached criminal law by hacking into e-mails for a story, even though the investigation applied to a case on a man who faked his own death to collect insurance money.

"What you were doing wasn?t just invading somebody?s privacy, it was breaching the criminal law," Leveson said during testimony by Sky News chief John Ryley. "At the end of the day you committed a crime."

Media regulator Ofcom said on Monday it started a probe of Sky News over the e-mail hacking incident.

BSkyB said earlier this month executives at Sky News cleared a reporter to access e-mails as part of his investigations into criminal activity, including the 2008 case of a British couple who faked the husband?s death in a canoe accident to collect life and mortgage insurance.

MUMBAI: Global media conglomerate News Corporation has suspended the voting rights of a portion of Class B Common Stock owned by foreigners in order to comply with U.S law that restricts foreign holdings and voting powers to be within 25 per cent.

The company asserted that the suspension of voting rights will not impact the rights of Non-U.S. Stockholders to receive dividends and distributions.

The decision to curtail voting rights was taken as the company discovered that foreign investors held a total of 36 per cent Class B Common Stock well above the permissible limit. The voting rights of 50 per cent of the Class B Common Stock held by Non-U.S. Stockholders was suspended immediately.

The remedial measure comes as the company, which owns and operates the popular Fox network channels, seeks to renew licenses for its 27 TV stations.

The company‘s 27 owned-and-operated stations and the Fox Broadcasting Company together generated $4.8 billion in revenue and $681 million in operating profit in fiscal 2011.

Accordingly, after the suspension of voting rights, the aggregate percentage vote of the Murdoch Family Interests will remain initially at 39.7 per cent of the outstanding shares of Class B Common Stock not subject to the suspension of voting rights.

According to Wall Street Journal, News Corp.‘s largest foreign investor is Saudi prince Alwaleed bin Talal, who has about 7 per cent of the voting stock.

Station owners are required to file biannual reports to the FCC that provide information on ownership interests, including foreign owners with a significant stake.

The disclosure comes in the backdrop of the multiple scandals that rocked the company in UK. Television regulator Ofcom is scrutinising whether James Murdoch and News Corp. are "fit and proper" persons to be in control of BSkyB, the company that runs Sky TV.

MUMBAI: It was a day of double whammy for media conglomerate News Corp as British lawyer Mark Lewis, who has been pursuing the phone hacking scandal, said that he planned to take the case to United States, the centre of Murdoch?s global media empire.

However, the bigger threat for Murdoch comes from a British Parliamentary report into a phone hacking scandal which may lead eventually to News Corp being forced into cutting or selling its stake in the highly profitable pay-TV firm BSkyB, according to newswire Reuters.

Lewis said he would take legal action on behalf of three people which includes two sportsperson and an American citizen.

?The News of the World had thousands of people they hacked. Some of them were in America at the time, either traveling or resident there," he said.

Lewis?s clients also include the family of Milly Dowler, an abducted teenager who was murdered in 2002, and whose voice mail was said to have been hacked after she disappeared.

Coming back to the Parliamentary panel?s report on the hacking scandal, the Reuters report says that the Parliament?s culture committee is widely expected to criticise News Corp in its long-awaited report.

The report also says that the panel?s criticism could raise possibilities that the British broadcast watchdog Ofcom will take action against Rupert Murdoch?s media conglomerate.

The culture select committee could publish its findings and recommendations into the scandal by the end of April to which the government must respond within two months.

Ofcom is already conducting its own investigation into News Corp and BSkyB?s directors to ensure that directors of TV companies are "fit and proper" to hold a broadcast licence.

Earlier this month, James Murdoch had stepped down as the chairman of BSkyB. However, he continues to remain a board member. In February, the Jr Murdoch had stepped down as executive chairman of News International that is being probed by UK authorities for phone hacking surrounding its now defunct News of the World paper.