UPDATE 2-James Murdoch quits UK newspaper boards

Wed Nov 23, 2011 12:30pm EST

Related Topics

* Murdoch quits UK publisher boards

* To remain chairman of News Intl UK newspaper group

* Murdoch faces re-election vote at BSkyB next week

By Kate Holton and Georgina Prodhan

LONDON, Nov 23 (Reuters) - James Murdoch has resigned from the boards of the publishing units within News Corp's British newspaper arm, which used to include the now-defunct News of the World tabloid at the centre of the phone hacking scandal, regulatory filings show.

Murdoch, son of media mogul Rupert and deputy chief operating officer of News Corp, remains chairman of News International, the News Corp unit that houses its British newspapers, and a member of the Times editorial board.

The News International unit has been damaged this year by the revelation that people working for the popular Sunday tabloid hacked into the phones of thousands to generate news.

Slow-burning investigations into the matter became front-page national news when it was revealed in July that one of the victims was missing schoolgirl Milly Dowler, who appeared to have been picking up voicemails but was later found murdered.

Ex-News of the World editor Rebekah Brooks resigned as chief executive of News International the following week, and was replaced by Tom Mockridge, the former head of News Corp-owned Sky Italia, on July 15.

"Following the appointment of Tom Mockridge as CEO of News International, in September James Murdoch stepped down from the boards of a number of News International subsidiary companies including News Group Newspapers (NGN) and Times Newspapers Ltd (TNL)," News International said in a statement.

Mockridge replaced Murdoch on the two company boards.

News Corp shares were down 1.6 percent at $16.14 at 1708 GMT, broadly in line with the S&P media index.

Harriet Harman, Britain's shadow minister for culture, media and sports from the opposition Labour party, said Murdoch should explain himself.

"James Murdoch should make clear why he has stepped down in this way. This does not lessen in any way the need for him to answer questions or take responsibility for what happened on his watch," she said in a statement.

The filings show that Murdoch resigned on Sept. 13 from Times Newspapers Ltd and on Sept. 19 from NGN. Sept. 13 was the date on which he discovered he would be recalled by a British parliamentary committee to answer more questions.

NGN is the company that has been sued by many of the phone-hacking victims, including Hollywood star Jude Law and his ex-girlfriend, actress Sienna Miller.

Media lawyer Mark Stephens said he did not believe the move had any legal implications for the phone-hacking cases. "He's either liable for what happened under his watch, or he's not," he told Reuters.

James Murdoch survived a vote to remain on the News Corp board last month only thanks to support from his family and another loyal shareholder.

Next week, he faces shareholders of British satellite broadcaster BSkyB, who will have to decide whether he should remain as non-executive chairman.

Harman said: "The concerns about whether he is a fit and proper person to run BSkyB remain."

Some News Corp investors would like to see the company sell its newspapers, in which media interest is disproportionate to the small contribution they make in revenues and profits.

Ivor Gaber, professor of political journalism at London's City University, said the move could indicate that Murdoch was still worried over his own exposure to the phone hacking scandal or that News Corp was preparing to sell its UK newspaper holdings.

"The Sun is now the only thing keeping the ship afloat, in commercial terms," he told Reuters.

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