Rupert Murdoch sued for nepotism over Shine purchase
18 Mar 2011
Rupert Murdoch and his News Corp are being sued over claims he is causing the company to pay about $675 million for ''nepotism'' in its purchase of his daughter's UK-based television production company Shine Group Ltd.
There is no reason for the purchase other than to reward Elisabeth Murdoch and perpetuate the family's involvement in senior management of the media empire, the Amalgamated Bank of New York and the Central Laborers Pension Fund (both shareholders in News Corp) said in the complaint.
The bank sued as trustee for several funds, through which it holds almost 1 million shares of News Corp, according to a complaint filed on Thursday on behalf of the company in Delaware Chancery Court in Wilmington.
Central Laborers, an Illinois- based pension fund, also filed a separate complaint seeking to inspect books and records outlining the company's decision to buy Shine.
''Although the transaction makes little or no business sense for News Corp and is far above a price any independent, disinterested third-party would pay for Shine, it is unsurprising that the transaction was approved by News Corp's board,'' lawyers for the bank said in the complaint.
Murdoch's daughter is expected to join the board of News Corp upon completion of the deal, the company said on 21 February.