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James Murdoch Faces Ofcom Test Into his Right to Sit on BSkyB Board

James Feels the Heat As News Corp. Scandal Deepens
Warren Allott/Getty Images

U.K. regulator sets up special team to look at Murdoch’s credentials amid the ongoing phone-hacking and corrupt payments investigation.

LONDON – British media regulator Ofcom is to dedicate a hand-picked team of people to help assess whether or not James Murdoch is a "fit and proper" person to sit on the board of satcaster BSkyB.

The regulator is to set up a dedicated team to sift through the reams of evidence of phone hacking and corrupt payments emerging from the police and the Leveson inquiry.

Under the name Project Apple, the regulator is also to assess the merits of Rupert Murdoch’s News Corp. as being a fit and proper controlling investor in the British satellite broadcaster.

Should Ofcom conclude that either Murdoch junior or News Corp. fell short of being appropriate owners of the satcaster, the regulator could pull Sky’s licence to broadcast in the U.K. and force a blackout of its channels.

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That action would only be averted if James Murdoch stepped down from the board or News Corp. sold its 39.1 percent stake in the British satellite business.

Ofcom disclosed minutes of its board meetings where the issue of fit and proper in relation to BSkyB was discussed.

The information, released under the Freedom of Information Act, shows that the matter was discussed in four Ofcom Board meetings first in September 2011 then November 2011, January 2012 and February 2012.

Ofcom has a duty under the Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting licence is, and remains, fit and proper to do so.

“In relation to the hacking and corruption allegations, new evidence is still emerging from the various enquiries,” the regulator said. “Ofcom is continuing to assess the evidence – including the new and emerging evidence – that may assist it in discharging these duties.”

Last week James Murdoch stepped down as executive chairman of News Corp.’s newspaper publishing division News International which owns The Sun and The Times and previously published The News Of The World which shuttered in the wake of the phone-hacking furore.

But he currently still heads BSkyB having taken over from Rupert Murdoch as chairman at the end of 2007.

Ofcom has an ongoing duty to ensure that any broadcaster passes the fit and proper tests as laid out in law.