Independent News Corporation director Peter Barnes has refused to comment on the scandal engulfing the media behemoth as a group of independent directors led by the US-based Tom Perkins and Viet Dinh raise concerns over Rupert Murdoch’s besieged leadership.
Crikey asked Barnes this morning whether the ageing executive chairman retained his confidence as the company’s global kingpin. But the 68-year-old former Philip Morris Asia chief didn’t commit one way or another, saying only that he couldn’t comment “either on or off the record”.
Barnes, a Sydney-based independent director, also refused to say whether he supported a move — reported this morning by Bloomberg — to install company president Chase Carey as CEO, leaving Murdoch as non-executive chairman. Under the scenario, James Murdoch would remain as the company’s deputy chief operating officer, dependent on any further revelations of what he knew about the News of the World phone hacking scandal.
According to News Limited sources with inside knowledge of the situation, a “move is on” to proceed with the putsch if the company’s share price continues to slump, headed by US Patriot Act mastermind Dinh, venture capitalist Perkins and fellow Australian Sir Rod Eddington — who was knighted for his London-based leadership of British Airways while he sat on the News board during the hacking years.
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Barnes is one of the seven fully independent directors on the 16-voting member News Corp board, with the remaining nine places retained as a gerrymander by either Murdoch family members or current and former News executives. He is regarded as one of News Corp’s most independent voices and might be expected to back any move against its octogenarian proprietor to preserve the company’s value.
The wine industry buff was elected to the News Board in 2004 to fulfill the requirement that the company maintains two Australian-based directors (the other one was Ken Cowley). Rupert Murdoch once sat on the board of Philip Morris when Barnes presided over the behemoth’s Asian operations during the 1990s. He currently serves on News’ audit committee and retains non-executive roles as the chair of grocery wholesaler Metcash and condom kings Ansell.
Crikey understands Barnes has been besieged with media requests since the blowtorch was turned on the company’s independent directorship in the wake of the NotW debacle that has seen News’ local shares slide 17% locally and 13% in the US.
Senior BBY analyst Mark McDonnell told Crikey this morning that if the News shareprice continued to slide, the 87% of shares controlled by interests not directly associated with the Murdochs would start to get nervous. But much would rest on James Murdoch and his father’s unprecedented appearance before a British Parliamentary Committee later tonight, to be televised live on channels Nine and Seven.
“If it was a case of Rupert’s going to fall on his sword but, hey, there’s going to be massive damages awarded against News Corp and forced divestments of assets — really punitive things happening to the company — then it’d make more sense to close ranks and dig in.”
“The risks here are quite significant, we’re talking potentially large-scale compensation claims.”
But if the Murdoch stench became overpowering, then Barnes could have serious cause for concern.
“The problem I see in particular is that James Murdoch was Rebekah Brooks’ direct boss.
“The options available to him are to say ‘I knew what was going on’, in which case he’s complicit. Or he says ‘I didn’t know’, in which case at a minimum he faces a credibility problem, or if you take him at his word he’s not competent.”
“Even if the insiders on the board don’t make a move, the public authorities might,” McDonnell said, suggesting that James and Rupert could be investigated under the US Foreign Corrupt Practices Act and banned as directors for good.
So far, the scandal has claimed five high-profile scalps, with Brooks, ex-NoTW editor Andy Coulson, Dow Jones CEO Les Hinton, Britain’s top cop Paul Stephenson and his deputy John Yates all falling on their swords.
News Corp’s Australian shares were holding steady at $14.61 as Crikey‘s deadline approached this morning, with the market waiting for tonight’s double-headed Parliamentary blockbuster.