News Corporation's board of directors, including chief executive and chairman Rupert Murdoch, has agreed a $139 million (€106.8 million) settlement of a lawsuit brought by investors, which claimed directors had turned a blind eye to illegal practices and mismanagement at News Corp that damaged share prices.
The shareholders sued the directors on behalf of News Corp; the money – which will be covered by the board's insurance – will be paid to News Corp itself rather than to shareholders directly.
Big shareholders – specifically Amalgamated Bank of New York, the Central Laborers Pension Fund and the City of New Orleans Employees' Retirement System – originally filed the lawsuit in March 2011 following the acquisition of UK-based television company Shine Group, founded by Murdoch's daughter Elisabeth.
Shareholders complained that the deal was uncompetitive. News Corp paid £415 million (€633.6 million) for Shine with Elisabeth Murdoch receiving a significant sum for her 53% stake. The suit was later widened to include the corporate culture that led to the phone-hacking scandal at a number of News Corp publications in the UK.
As part of the settlement, News Corp has also agreed to impose stricter corporate governance and compliance structures and set up an anonymous whistle-blower's hotline for tip-offs about malpractice.
News Corp said in a statement: “We are pleased to have resolved this matter. The agreement reflects the important steps News Corporation has taken over the last year to strengthen our corporate governance and compliance structure and we have committed to building on those efforts going forward.”