Rupert Murdoch, who recently turned 80, is being pushed to name a successor after a News Corp shareholder filed a lawsuit accusing the media empire of “rampant nepotism”.
New York-based Amalgamated Bank, which owns more than one million News Corp shares, alleges Murdoch’s move to use company money to buy daughter Elisabeth’s TV production company, Shine, is illegal.
''Murdoch's admitted purpose in entering into the transaction is to bring Elisabeth back to the family business,'' Amalgamated says in a 46-page claim lodged in a Delaware court. ''Once the prodigal daughter is back into the News Corp fold, she will vie with her brothers, board members James and Lachlan, for the position of successor to Rupert Murdoch's global media dynasty. In short, Murdoch is causing News Corp to pay $675 million for nepotism.''
Commentators see the law suit as an effort to get Murdoch to come clean about who will replace him at the helm of one of the world’s biggest media companies. Institutional investors and corporate governance specialists are increasingly becoming anxious at the apparent lack of a succession plan at the family-controlled business.
One expert has said that hedge funds and other investors are looking to short News Corp shares when there is the slightest indication of Murdoch losing control of the business without appointing a successor. “He’s playing the succession issue close to his chest, which could ultimately hurt the longer term performance of the company,” said the expert.