Murdochs could face challenging time when shareholders meet on Friday

MUMBAI: The shareholder meeting of US media conglomerate News Corp takes place on Friday. If reports are to be believed, the Murdochs could be in for a tough time.

There has been talk that shareholders might use the opportunity to put some pressure on Rupert Murdoch and his family to loosen their grip on the company. 

The Murdochs control about 40 per cent of voting stock and a Saudi prince that supports them controls seven per cent. So a vote will not work to get the family to cede control of the company. However, shareholders could send a signal by voting against long-standing board members including James and Lachlan Murdoch.

The meting comes after the phone hacking scandal which led to the closure of ?News Of The World?. Saying the scandal "laid bare a striking lack of stewardship and failure of independence" by the board, shareholder advisory firm Institutional Shareholder Services has recommended that stockholders withhold their votes from most company directors standing for re-election, including Rupert Murdoch and his sons James and Lachlan. Another shareholder advisory firm, Glass Lewis & Co., has recommended a vote against some directors, including Murdoch?s sons.

Two California state employee pension funds will vote their shares against re-appointing Rupert Murdoch to the board. At the same time some analysts feel that since the company?s fundamentals are still solid, to overthrow the management team would be a drastic step at this juncture. What could pose a bigger problem, though, is if there is a rift between father and son James. Reports indicate that this is happening due to a difference in vision between them.