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Murdoch Reported to Drop British Satellite Bid

July 13, 2011 by Leave a Comment

There was no immediate official confirmation of the news.

The development was the latest upheaval flowing from the phone hacking scandal within Mr. Murdoch’s British newspaper empire that has convulsed his company and ended what, for years, had been a close, cozy and influential relationship with the British establishment.

Only hour s before the news, Prime Minister David Cameron had sought to distance himself from Mr. Murdoch and had urged him to drop the bid for British Sky Broadcasting, also known as BSkyB. The announcement came just before Parliament was set to approve a cross-party call for Mr. Murdoch to abandon his ambitions toward the broadcaster.

On Wednesday, Mr. Cameron offered details for the first time of a broad inquiry into the relationships among the police, politicians and the press in the broadening scandal confronting the Murdoch newspaper holdings in Britain.

Speaking to Parliament, Mr. Cameron said that the inquiry would be led by a senior judge, Lord Justice Leveson, and that it would have the power to summon witnesses to testify under oath. The announcement came as Mr. Cameron fought to recover the initiative in a scandal that has turned into potentially the most damaging crisis of his time in office.

He said the inquiry would examine the ethics and culture of the British media as well as the accusations of phone hacking at The News of the World underlying the scandal. It would also investigate why an initial police inquiry failed to uncover the extent of the scandal and allegations that journalists paid corrupt police officers.

He said he wanted the inquiry to be “as robust as possible, one that can get to the truth fastest and get to work the quickest, and one that commands the full confidence of the public.”

Mr. Cameron said it should complete a report on the future regulation of the press within a year, but he acknowledged that inquiries into allegations of criminal wrongdoing — which the police are also investigating — would take longer.

Mr. Cameron’s Conservative Party took power in May 2010, supported by some of the newspapers in Mr. Murdoch’s British stable, and his critics said that he, like some of his predecessors in 10 Downing Street, sought to maintain that support even as the phone hacking scandal smoldered before erupting into a crisis

Only a week ago, Mr. Cameron said it was not for politicians to interfere in the workings of private companies. But on Wednesday, he urged Mr. Murdoch to abandon his $12 billion bid for more than 60 percent of the shares in British Sky Broadcasting which he does not already own, saying Murdoch executives should “stop the business of mergers and get on with cleaning the stables.”

Later Mr. Cameron met the parents of Milly Dowler, a 13-year-old girl abducted and murdered in 2002. The phone hacking scandal exploded last week with reports that The News of the World had tried to hack into her voice mail after she went missing. Up until then the phone hacking had seemed to be restricted to the voice mails of prominent people.

In a rancorous session at the weekly encounter in Parliament known as prime minister’s questions, Mr. Cameron also came under renewed pressure from opposition Labour leader Ed Miliband to explain his relationship with his former director of communications, Andy Coulson, a former editor of The News of the World — a top selling Sunday tabloid at the epicenter of the scandal which the Murdoch family ordered closed last weekend.

A lawmaker also asked if there was evidence that journalists at News International, a British subsidiary of Mr. Murdoch’s News Corporation, had tried to hack into the voice mail of victims of the Sept. 11, 2001 attacks in the United States, as they are accused of doing in Britain after the July 7 London bombings in 2005.

The Daily Mirror newspaper had reported that journalists had sought to secure phone data concerning Sept. 11 victims from a private investigator in the United States. Mr. Cameron said he would investigate the issue.

In what seemed an indication of further uncertainty at News International, news reports said Tom Crone, the company’s legal manager, had left the firm but it was not clear why.

John F. Burns and Don Van Natta Jr. reported from London, and Alan Cowell from Paris. Reporting was contributed by Jo Becker, Ravi Somaiya and Graham Bowley from London, and J. David Goodman from New York.

Article source: http://feeds.nytimes.com/click.phdo?i=3edc3ea69ae5a79f960bf602d5cf3483

Filed Under: Business News Tagged With: , ,

A Top British Leader Urges Murdoch to Drop TV Deal

July 11, 2011 by Leave a Comment

The developments deepened the fallout from The News of the World phone-hacking scandal which has been transformed from a long-simmering controversy into a full-blown crisis swirling around Mr. Murdoch’s British operation, News International, and its chief executive, Rebekah Brooks.

The furor erupted last week with reports that The News of the World, the top-selling Sunday tabloid in Mr. Murdoch’s British media empire, hacked into the voice mail of Milly Dowler, a 13-year-old school-girl abducted and murdered in 2002, after she disappeared but before her body was found.

Such was the public outcry against the 168-year-old newspaper that Mr. Murdoch’s family ordered it closed after its final edition appeared on Sunday. Many commentators in Britain saw the closing of the paper as a move to cauterize the phone-hacking crisis and save the bid for the much more profitable British Sky Broadcasting.

Ms. Dowler’s parents met on Monday with Mr. Clegg, the leader of the Liberal Democrat junior partner in Prime Minister David Cameron’s coalition government. The encounter cranked up pressure on Mr. Murdoch, who flew into London on Sunday to take charge of his company’s response to the crisis.

Mr. Clegg urged Mr. Murdoch to “look how people feel about this. Look how the country has reacted with revulsion to the revelations” about the phone-hacking scandal.

“Do the decent and sensible thing, and reconsider, think again about your bid for BSkyB,” Mr. Clegg said, referring to the satellite broadcaster by its initials.

In what seemed a further broadside against Mr. Murdoch and his lieutenants, a lawyer for the Dowler parents, Mark Lewis, added their voice to the chorus of calls for the resignation of Ms. Brooks, who was editor of The News of the World at the time of the hacking. Ms. Brooks is now the chief executive of News International, the British subsidiary of Mr. Murdoch’s News Corporation, and Mr. Murdoch has staunchly resisted calls for her to go.

The Dowlers “don’t see why she should stay in the job,” Mr. Lewis said. “They see this as something that went right to the top.”

“She was editor of The News of the World at the time that Milly was taken in 2002. She should take editorial responsibility,” Mr. Lewis said.

The takeover deal had already run into fresh trouble on Sunday when the opposition Labour Party promised to take its battle against the bid to a vote in the House of Commons — a step that, if successful, could deal a fatal blow to the bid.

In early trading on the London stock exchange on Monday, shares in British Sky Broadcasting retreated sharply as investors worried that the takeover deal — anticipation of which had pushed the share price up — would collapse. The stock fell 7.3 per cent early on Monday to 695 pence, or $11.12, compounding a slide from a level of 850 pence before the phone hacking scandal at The News of the World tabloid threw Mr. Murdoch’s British businesses into turmoil. The share price later recovered to around 709 pence — a decline of 5.5 per cent.

On Monday, British news reports said the culture secretary, Jeremy Hunt, who is the minister responsible for the deal, was contacting both the Office of Fair Trading and the media regulator, Ofcom, to determine whether the bid could now be referred to competition authorities.

The contentious bid also seemed to be driving a wedge between Britain’s uneasy coalition partners, with Mr. Clegg’s Liberal Democrats saying they might side with the opposition Labour Party in the House of Commons.

Tim Farron, the Liberal Democrat Party president, told the BBC that, in principle, the party’s lawmakers could support a Labour motion critical of Mr. Murdoch’s ambitions. “I cannot see how, if a legally worded motion comes to the House opposing a further Murdoch takeover of BSkyB, I cannot see how Liberal Democrats would vote against that,” he said.

John F. Burns reported from London and Alan Cowell form Paris. Ravi Somaiya contributed reporting from London.

Article source: http://feeds.nytimes.com/click.phdo?i=e87f9232783c71b74d4e211cfd4b6749

Filed Under: Business News Tagged With: , ,

Bank of England Urges Clarity in Sovereign Debt Exposure

June 24, 2011 by Leave a Comment

LONDON — The Bank of England governor, Mervyn A. King, said Friday that the worsening debt crisis in Greece and other European countries is currently the biggest threat to Britain’s financial system.

Mr. King urged British banks to be especially diligent and clear in disclosing their exposure to European sovereign debt, to avoid a collapse of confidence among investors. He also called on banks to set aside more capital when earnings are strong instead of distributing it to shareholders or employees.

“The most serious and immediate risk to the U.K. financial system stems from the worsening sovereign debt crisis in several euro-area countries,” Mr. King said during a briefing on financial stability by the interim Financial Policy Committee, which he chairs.

The newly created committee, which includes executives from the Bank of England and the Financial Services Authority, is a result of Prime Minister David Cameron’s revamp of the country’s financial regulation following the banking crisis.

Mr. King’s comments came as European Union leaders met in Brussels to discuss an aid program for Greece and ways to stabilize the area that shares the euro as a single currency. Greece has until the end of the month to meet conditions for its next financial aid payment of €12 billion, or $17 billion, ahead of a finance ministers’ meeting on July 3.

Some investors remain concerned that the Greek prime minister, George A. Papandreou, could struggle to gather enough support to push through the necessary budget cuts, which has pushed down the euro and weighed on European stock markets in recent days. Jean-Claude Trichet, the president of the European Central Bank, warned earlier this week that the sovereign debt crisis posed a serious threat to the financial stability of Europe.

“Any escalation of stresses could also be transmitted via interconnected global markets, including via the United States, leading to a tightening of bank funding conditions,” the Financial Policy Committee said. “Such contagion could be amplified if bank creditors were unsure about the resilience of their counterparties.”

Mr. King said he was less worried about British banks’ direct exposure to Greek debt, which he said was “very small,” but that a lack of transparency and increased risk-awareness could paralyze financial markets.

“If there’s uncertainty about exposures and a lack of transparency, there’s always the risk that people may feel it’s just not worth continuing the rollover funding to institutions,” Mr. King said. “Greater clarity about the extent of these exposures would help to limit the transmission of problems to U.K. banks.”

The European Banking Authority said Friday that it had adjusted its stress tests of European banks to better account for potential trading losses on sovereign debt from troubled economies, including Greece. The results are due next month.

“It’s necessary that stress tests are credible,” Mr. King said. The hope is that detailed data on the banks’ capital and government debt exposure would calm those investors who fear a Greek default.

The Financial Policy Committee also warned that British banks should improve their provisioning for real estate loans that are in arrears or had breached some covenants. The committee implied that some banks were not diligent enough in setting aside money to cover such loans, which were mainly for commercial real estate.

The committee also said it was increasingly mindful of risks linked to exchange-traded funds, which are now worth $300 billion in Europe, and asked the Financial Services Authority to monitor the industry more closely.

Article source: http://www.nytimes.com/2011/06/25/business/global/25iht-ukbanks25.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Media Cache: E.U.’s Internet Scoreboard Doesn’t Tell the Story

June 6, 2011 by Leave a Comment

PARIS — Remember the Lisbon Strategy? That was the European Union’s grand plan, set out in March 2000, to make the bloc “the most competitive and dynamic knowledge-based economy in the world” within a decade.

Well, 2010 came and went, and Europe didn’t look much more competitive or dynamic than it had a decade earlier.

So what did E.U. leaders do next? They drafted a new 10-year plan. The resulting Digital Agenda for Europe, adopted last year, contains 101 “actions” aimed at improving high-technology competitiveness.

To demonstrate that it really means business this time, the European Commission published a “scoreboard” last week to measure progress toward the 2020 goals.

The results so far? “Eleven actions have been completed (two ahead of schedule), six actions due to be delivered last year are delayed and the other 84 are largely on track,” the commission said.

Among other things, the completed actions include “setting out technical specifications for telematic applications for rail passenger service,” which has something to do with making it easier to buy tickets for cross-border train travel. The Union has also completed the action of agreeing to “support the continuation of the Internet Governance Forum beyond 2010.”

This is surely worth a high-five in Brussels. Yet politicians in national capitals seem increasingly preoccupied with the idea that their countries are falling behind the United States and China, among others.

Last autumn, Prime Minister David Cameron of Britain lamented the fact that there was no equivalent to Silicon Valley in his country and proposed measures to encourage high-technology entrepreneurship.

President Nicolas Sarkozy of France summoned global leaders of the technology industry to Paris last month for a forum on the future of the Internet, in connection with the Group of 8 summit meeting. He then alienated some of them with calls for greater governmental oversight of the Internet, prompting sneers that he just didn’t “get” digital technology.

In fact, Europe is not the technological laggard it is sometimes portrayed as being. Broadband should be available to all Europeans by 2013, the commission says; that is seven years ahead of a comparable U.S. goal. Internet use is rising across Europe, and more Europeans are shopping online, the commission’s scoreboard shows.

Yet Europe does trail in one very obvious way. It has produced no global Internet companies to rival the likes of Google, Facebook or Twitter.

The scoreboard suggests one possible reason for this. Europe invests considerably less than other industrialized countries in research and development of information technology, it says.

Another reason may be the sluggish development of cross-border e-commerce within the European Union, which has dampened hopes for the development of the Union’s “single market.” The scoreboard shows that fewer than 9 percent of Europeans bought something from an online retailer based outside their country last year. That is far short of the commission’s goal of 20 percent by 2015.

Without a functioning single market, it is difficult for European Internet companies to achieve significant scale. To do so, they would effectively have to create 27 local companies — one for each E.U. country. Few European start-ups have access to the necessary investment or expertise.

What often happens instead is that European Internet companies sell out to a foreign owner once they reach a certain size. Last week, for example, the U.S. technology company IAC/InterActive, which owns Match.com, agreed to buy Meetic, a European online dating site with which it already had a partnership. Last month, Twitter agreed to buy TweetDeck of Britain.

Deals like those may encourage would-be European technology entrepreneurs to give it a try. Yet until Europe creates homegrown Internet giants, politicians and the public may feel that they are losing the Internet game — no matter what the scoreboard shows.

Article source: http://www.nytimes.com/2011/06/06/technology/06cache.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,
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