Stockholder group sues Murdoch

LONDON, July 11 (UPI) -- A News Corp. stockholder group Monday sued Rupert Murdoch, saying they found it hard to believe he was unaware of the phone-hacking scandal at a tabloid.

The shareholder group includes banks and pension funds. The shareholder group accused Murdoch of "rampant nepotism" and viewed his media holdings as a "family candy jar," The Guardian reported.

The News of the World ended publication after 168 years Sunday, as anger mounted over allegations of phone hacking of public officials and private citizens, as well as corruption.

The suit, filed in Delaware where News Corp. is incorporated, also said it was "inconceivable" Murdoch and son James Murdoch didn't know about the phone-hacking that allegedly went on at News of the World.

"These revelations should not have taken years to uncover and stop," the filing said. "[They] show a culture run amok within News Corp and a board that provides no effective review or oversight."

The shareholders also said in their suit Murdoch's interference with good corporate governance led to a "Murdoch discount" that depressed the value of stock shares below those of other similar media companies.

"The fact that the board has been so passive despite years of misconduct is a testament to how lacking in independence its members are from the Murdoch family," the suit said.

Meanwhile, News Corp. said it still intends to acquire the 61 percent of satellite broadcaster British Sky Broadcasting Group it doesn't already own, but decided to withdraw concessions meant to make the takeover more palatable to British regulators.

"News Corp. continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the U.K.," the company said on its Web site.

Culture Secretary Jeremy Hunt has referred Murdoch's bid to take full control of BSkyB to the Competition Commission, the BBC reported.

Also, Labor Party leader Ed Miliband and Deputy Prime Minister Nick Clegg called on Murdoch to drop his bid for BSkyB.