Tom Watson, the Member of Parliament who has had a significant role in investigating the phone hacking scandal at News Corp., has warned investors that allegations the company’s UK arm hacked into government computers is potentially a much more serious issue.
The Guardian newspaper reported this week that police are investigating claims that private detectives working for News International hacked into the computer of then Northern Ireland Secretary Peter Hain. News International has said it has no comment on the allegations.
The Guardian said senior civil servants and intelligence agents were also targeted. Hain has called in top law firm Mishcon de Reya to act on his behalf.
“Computer hacking is possibly a bigger thing than phone hacking,” Watson said in remarks prepared for the Local Authority Pension Fund Forum (LAPFF) conference.
Watson, the Deputy Chairman of the opposition Labour Party, has become prominent for his role in Parliament’s Culture Media and Sport Select Committee probe into the hacking scandal. He was not able to deliver his comments in person and they were read out by a third party.
Shareholders were not taking account of the risks facing BSkyB, the UK broadcaster that is 39% owned by News Corp., Watson said. He referred to a potential action by broadcasting regulator Ofcom.There was a “major cover-up of widespread illegal activity. Shareholders are not aware of the possible risks here”.
Nineteen percent of votes at the BSkyB annual general meeting this week were against James Murdoch. “Personally I’d be surprised if there isn’t a new BSkyB chairman by the time of your next conference,” Watson said.
This view was echoed by LAPFF Chairman Ian Greenwood, who said: “There’s a problem when the director becomes the story – and James Murdoch is going to be the story for the foreseeable future.
“I don’t know how he’s going to get through another AGM, quite frankly, if the situation gets any worse.”
Greenwood went into detail about the forum’s engagement with News Corp. and BSkyB, which pre-dates the eruption of the scandal in the summer.
He said LAPFF has a positive relationship with News Corp. directors Andrew Knight, Rod Eddington and Viet Dinh. At BSkyB, there’s a good relationship with Senior Independent Director Nick Ferguson.
He explained: “You’ve got to act with balance and intellectual rigour. We’re not just screaming from the rooftops.” Greenwood acknowledged the contribution James Murdoch has made to BSkyB’s strategy.
Investors shouldn’t aim to vote off all directors – which would make the company “totally rudderless”.
Greenwood added it was important not to be “politicised and personal”.