By Kate Holton and Georgina Prodhan
LONDON, April 3 James Murdoch, under fire over
his handling of a phone hacking scandal that has convulsed his
father Rupert's media empire, is to step down as chairman of
pay-TV group BSkyB, its news channel reported on
The report said Murdoch would quit after a board meeting
later in the day. Neither BSkyB nor News Corp, where
Murdoch is deputy chief operating officer, would comment.
Murdoch has been heavily criticised for his handling of the
scandal, which rocked the British press, politicians and police
last year, and he had faced repeated calls to step down from his
role at Britain's dominant pay-TV group.
The 39-year-old son of Rupert Murdoch, once seen as heir to
his father's company, has continued to plead his innocence ahead
of a parliamentary report investigating the phone hacking
scandal, which is expected to be heavily critical of him.
The chairman of the committee, John Whittingdale, told
Reuters James had not seen the report.
"We have not given wind to anybody of what might be in the
report," he said, adding that the removal of Murdoch as chairman
of BSkyB would allow the successful pay-TV group to distance
itself from the wider problems at News Corp, its 39-percent
Murdoch, who was previously chief executive of BSkyB, was
dealt a heavy blow in November when more than 40 percent of the
company's independent shareholders failed to back his
re-election as chairman.
Since then he has stood down from his board positions at
News Corp's British newspaper arm, and moved to the
United States to take up his new role running international
"It was inevitable," media commentator Roy Greenslade, who
has previously worked for Rupert Murdoch, told Reuters. "His
position was increasingly untenable."
A major shareholder said: "I have no particular axe to grind
about James Murdoch, but if this rumour is correct then at least
it would remove some uncertainty from the stock. Investors could
get back to focusing on the company's business rather than its
corporate governance issues," the UK-based investor said.
News Corp's British newspaper arm, News International, has
admitted its News of the World tabloid hacked into the phones of
crime victims, war dead and celebrities to generate stories.
It has since shut the 168-year-old paper, apologised and
settled numerous court cases. However in recent weeks it had
faced new allegations about hacking at its pay-TV operations,
which it has strenuously denied.
At the height of the scandal last summer, Prime Minister
David Cameron ordered a judicial inquiry into the standards of
Britain's media, while the media regulator is examining whether
Murdoch and News Corp were "fit and proper" owners of BSkyB's
"I do think the Leveson inquiry, Commons Select Committee
report and the Ofcom "fit and proper" test are a triple whammy.
He really must have known it was better to go sooner rather than
later," Greenslade said.
Sky News said Murdoch would remain a non-executive director
of BSkyB and his place would be taken by Nicholas Ferguson, the
senior independent director on the board. News Corp was "fully
committed" to James, a source familiar with the situation said.