News Corp. Chief Executive Rupert Murdoch showed defiance in the face of angry shareholders at its annual meeting on Friday as they slammed the media company for poor corporate governance and said he should give up the chairman role.
Murdoch also heard from British member of parliament Tom Watson who said that journalists at the now defunct News of the World hacked computers as well as telephone voice mails.
I promise you absolutely that we will stop at nothing to get to the bottom of this, Murdoch said in response to Watson's claims.
Murdoch was feisty in defending his company. At times, he pounded his fist on the podium, but he was generally good natured, at times smiling and laughing as he interrupted speakers.
Representatives from major U.S., British and Australian pension funds and other shareholders criticized the company's ethical practices in the wake of the phone hacking scandal.
Watson, the British MP who probed Murdoch's and son James's roles in the scandal at a parliamentary inquiry in July, flew to Los Angeles this week to attend the meeting.
He represents 1,669 shares of nonvoting stock held by the AFL-CIO.
I want to leave institutional investors with no doubt about the criminal wrongdoing that took place at this company, Watson said.
He said ahead of the meeting that shareholders should see that a $32 billion media conglomerate like News Corp could not continue to be run like a dysfunctional family business.
I think Rupert Murdoch is nearing his Rosebud moment, he said in a reference to the 1941 Orson Welles film Citizen Kane about a fictional media mogul modeled on real-life U.S. newspaper baron William Randolph Hearst.
News Corp is struggling to keep a lid on the fallout in the wake of the phone hacking scandal at the News of the World which has rocked the company to its core.
Since Murdoch has 40 percent control of News Corp's voting B shares and is supported by the next largest holder, Saudi Prince Alwaleed bin Talal, it is unlikely that Murdoch, his sons James and Lachlan or any other long-time serving director could get voted off the board.
However, corporate governance watchers will focus on whether the board receives a much lower share of the vote than it would normally expect. A significantly lower vote could force some sort of board shake-up in coming months. Details of the vote might not become clear until early next week.
Among the many concerns for Murdoch aides is the strong possibility of further reputation damage and embarrassment even though the event is being carefully staged in Murdoch's own backyard at Zanuck Theater on the Fox Studios lot in Hollywood. It is a change from previous AGMs in recent years at public venues in New York City such as the Asia Society.
Also present will be protesters from a group called Avaaz who had previously campaigned against News Corp's withdrawn bid to take full control of UK satellite operator BSkyB. There were early reports of increased police presence around the Fox lot.
News Corp will be trying to avoid a similar incident as when Murdoch was physically assaulted with a foam pie during the parliamentary committee meeting this summer.
Avaaz Campaign Director Emma Ruby Sachs said over a thousand Avaaz supporters launched a phone blitz on shareholders asking them to fire the Murdoch Mafia.
(Reporting by Lisa Richwine in Los Angeles and Yinka Adegoke in New York. Editing by Robert MacMillan)