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Last Updated: Friday, 14 November, 2003, 16:14 GMT
Murdoch double act survives AGM
By Bill Wilson
BBC News Online business reporter at the Sky AGM

James Murdoch leaves the QE2 conference centre
James Murdoch is looking forward to "working for all shareholders"

The media had scented blood ahead of Friday's shareholder get-together to discuss the controversial election of James Murdoch to the board of BSkyB.

But in the end shareholders decided just to give the new chief executive and his chairman father, media tycoon Rupert, a slightly bloody nose.

Beforehand there had been talk of disaffected shareholders holding large blocks of shares perhaps making Murdoch Junior's appointment something less than a fait accompli.

Big institutional shareholders made it clear they had misgivings about the 30-year-old's appointment, but, when it came to it, there was no sign of the type of revolt that saw Michael Green ousted from ITV.

It was Lord St John of Fawsley, the non-executive director who headed the nominations committee for the CEO post, who drew the institutions' heat.

And it was left to the small shareholders to fire the strongest criticisms at the appointment that makes James the youngest chief executive of a FTSE 100 company.

Can I congratulate the board on scoring a monumental own-goal?
Small shareholder James Marshall
One man was standing outside the BSkyB annual general meeting at the QEII conference centre in Westminster, London, chanting "Turkeys voting for Christmas".

There had been claims that the appointment was an act of nepotism, and that the chief executive would not be suitably independent from his chairman father.

However when the meeting got underway a bullish Rupert Murdoch said the appointments procedure, which brought so much flak for Lord St John, was "rigorous" and "thorough".

After saying he "fully understood the suspicion of possible nepotism" and that there was no "overlap", he then heard from the floor.

'Unfortunate situation'

David Summerfield, of the UK's third largest pension fund Universities Superannuation Scheme (USS), told Rupert Murdoch: "We still have misgivings about the appointment of the new CEO, given such a complex process has been carried out in such a short time.

"Only one candidate was put forward for recommendation, your son, so the outcome was hardly surprising, given your support for him from the start.

"We have an unfortunate situation, which makes a mockery of the UK system of having a chairman and chief executive independent of one another."

Legal & General, another big investor, felt "the chairman and chief executive may be the best people for their individual posts, but it is the combination we are worried about".

Andrew Tusa of Deutsche Asset Management said he was worried at the number of News Corp executives on the BSkyB board.

As the slightly-muted criticisms were aired, James Murdoch nervously sipped water, crossing and uncrossing his hands, or putting a finger to his lips and staring thoughtfully into space.

Then Patrick Evershed, of New Star Asset Management, rose and declared: "I give my full support the board.

"I am happy with them and cannot understand the theory that there is conflict between the Murdoch family, News Corp, and the other shareholders.

"I am sure if James doesn't live up to his deserved reputation, then the chairman will be the first to get cross."

'Breakfast table'

Just when it looked like Murdoch and Murdoch were going to breeze through, it was left to the small shareholders to take a blast.

Pensioner Ken Colvert, attending his first shareholders' meeting, said: "I have the image of major decisions being made over the Murdoch breakfast table, or over cosy late night meals.

"I do not believe the ordinary shareholders have been listened to."

His comments were backed by fellow shareholder John Marshall, who fumed: "Can I congratulate the board on scoring a monumental own-goal.

Rupert Murdoch leaves the QE2 conference centre
Rupert Murdoch: "No nepotism involved in appointment"
"It is extremely unfortunate that the chairman and chief executive are from the same family."

Rupert Murdoch brushed aside the criticisms with a curt "your comments are duly noted", proceedings sailed to an end, leaving James' appointment on the board comfortably voted through by a ratio of about five-to-one.

That was in no small part due to the 35% shareholding held by his father's News Corporation.

At the end a relatively unscathed James was able to reiterate his "commitment to all shareholders", and the company's goals and targets.

Leaving at the end, he strode confidently towards the media pack, and said: "Excuse me, I have to get back to the office now and get some work done."

Ten minutes later his father Rupert left with a satisfied smile on his face, ignoring the "turkey" man's cries, and reflecting on what he will no doubt feel was a good day's work.




WATCH AND LISTEN
The BBC's Jenny Scott
"Trying to keep BSkyB in the family has sparked outrage"



SEE ALSO:
Murdoch survives investor protest
14 Nov 03  |  Business
Why Sky stuck with Murdoch's son
11 Nov 03  |  Entertainment
Shareholder group criticises BSkyB
05 Nov 03  |  Business
The City looks Sky-ward and scowls
04 Nov 03  |  Business


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