Rupert Murdoch Speaks Out on Phone Hacking Charges: ‘Deplorable and Unacceptable'

9:24 AM PST 07/06/2011 by Georg Szalai
Charles Eshelman/FilmMagic/Getty Images

He backs his firm's top U.K. newspaper executive and says his company is "fully and proactively" cooperating with a probe, with former NYC schools chancellor Joel Klein set to provide "important oversight and guidance."

NEW YORK - News Corp. chairman and CEO Rupert Murdoch on Wednesday said his company is "fully and proactively" cooperating with a police probe into a phone hacking allegations against the company's News of the World newspaper, calling the allegations "deplorable and unacceptable."

He also expressed support for Rebekah Brooks, the company' most senior newspaper unit executive in the U.K. and former head of the tabloid.

"Recent allegations of phone hacking and making payments to police with respect to the News of the World are deplorable and unacceptable," Murdoch said in a statement. "I have made clear that our company must fully and proactively cooperate with the police in all investigations and that is exactly what News International has been doing and will continue to do under
[CEO] Rebekah Brooks’ leadership."

The media mogul added: "We are committed to addressing these issues fully and have taken a number of important steps to prevent them from happening again."

He said he has appointed former NYC schools chancellor Joel Klein, who recently joined News Corp. to build its education business, to provide "important oversight and guidance." Klein, who received his law degree from Harvard Law School and worked in law jobs earlier in his career, and Viet Dinh, an independent director on News Corp.'s board, will keep the board
"fully advised," according to Murdoch.

Earlier in the day, it became clear that Murdoch's bid to take full ownership of BSkyB will likely face at least an extended delay amid public outrage over the phone hacking allegations. British Prime Minister David Cameron on Wednesday said that News Corp. would have to face a test of its "fit and proper" eligibility to hold a broadcast license before the acquisition could be cleared.

News Corp. shares were down 3.2 percent mid-day at $17.94. "It's a slight negative, but something that probably dissipates over time," Wunderlich Securities analyst Matthew Harrigan said about the phone hacking scandal. Collins Stewart analyst Thomas Eagan said that some investors are concerned, even though this may prove to be untrue, that the phone hacking issue "increases the price, delays the approval and adds additional concessions" in News Corp.'s attempt to take full control of BSkyB.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

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