The News Corp proxy statement for this year’s AGM makes the rather odd
claim that “KR Murdoch disclaims any beneficial ownership of the Harris
Trust,” the main vehicle in which the family’s 29.8% voting stake is
held.

Given the shock resignation of Lachlan Murdoch two months
ago and John Malone aspirations to increase his influence over News
Corp, this paved the way for a question about who controls the Murdoch
family stake. After all, we know that Rupert’s four adult
children from his first two marriages each have one representative on
the corporate trustee and Rupert has four, although these automatically
must resign when he dies. That sounds like a 4-4 deadlock, so who has
control?

Given Lachlan’s appointment of aggressive Sydney
litigation lawyer Michael Ball to represent him on the trust after
Rupert’s unilateral decision to change the terms and give an equal
share to his two infant children to Wendy Deng, the question of who
actually controlled the stake was a live one.

Rupert declined to
reveal whether he had unfettered control over how the shares were voted
at AGMs, but then did answer the question as to whether he alone could
decide to sell the stake into a Liberty Media takeover, were one to
come along.

“No,” was the simple answer, meaning that the
children, as beneficial owners of the shares, can determine whether to
sell the shares, although presumably Rupert has a veto while he’s
alive.

It must be very frustrating for the adult children to
know they will one day each be billionaires in their own right, but the
trusts have never made them a distribution.

Peter Fray

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