Myners calls for Murdoch to step down as BSkyB Chair

Lord Myners, the former UK Financial Services Secretary and now UK Chairman at Cevian Capital, the activist fund manager, has called on the board of BSkyB, the FTSE100-listed UK satellite broadcaster, to force James Murdoch to stand down as company Chairman, citing concerns about his “business judgment”, partly as a result of the phone hacking crisis enveloping the News Corporation (News Corp) group, which owns 39.1% of BSkyB. The former City Minister told a debate in the House of Lords on Friday (July 15), that the entire BSkyB board should also put itself up for re-election at its annual general meeting later this year. And Myners called on BSkyB shareholders to ensure that News Corp’s influence on the company board was “proportionate”. He told the Lords: “It is important that BSkyB in these circumstances establishes an appropriate distance from News Corp as a shareholder.” At BSkyB’s annual general meeting in 2010 a number of major institutional investors already voted against James Murdoch’s re-election as a director, including Aviva, Baillie Gifford, Legal & General, and Co-operative Asset Management. BSkyB shareholders are reported to be awaiting the outcome of testimonies to be given to a UK Parliamentary Committee tomorrow (July 19) by James Murdoch and his father Rupert Murdoch, before they act. They are particularly concerned that James Murdoch, Chairman and Chief Executive of News Corp in Europe and Asia, acknowledged that he personally approved the paymentof nearly £2m to end two lawsuits against the company. Murdoch admitted: “I now know that I did not have a complete picture when I did so. This was wrong and is a matter of serious regret.” Last week, News Corp abandoned its bid for the 61% of shares that it doesn’t own in BSkyB after the UK government referred the bid to competition and regulatory authorities. That followed public outcry over phone hacking at the News of the World, part of News International, the UK arm of News Corp. On July 5, BskyB shares were worth 850p each. Now, the shares are trading at 704p, down 17%, but they have traded as low as 690p each. Myners said: “There are sufficient doubts about his business judgment. His investments in MySpace and AP Dow Jones, the large loss consequent on the investment in ITV, and the settlements that he now admits he entered into without fully understanding the facts, are surely all reasons why it is no longer appropriate for Mr James Murdoch to chair BSkyB. I should add that Mr James Murdoch intends to move to New York, which makes it even more difficult to believe that he is the right person to chair a British broadcaster.” Myners said Nicholas Ferguson, the senior independent director of BSkyB, would be an appropriate replacement Chairman at the company. BSkyB will announce preliminary financial results for the twelve months ended 30 June 2011 on Friday 29 July 2011 with a presentation for analysts and investors in London.