There’s an old saying in politics: “The only person telling you the truth is the one who says they are not voting for you.”

And so it goes with the ongoing debate about how Saudi Prince Alwaleed bin Talal voted his 6.6% stake at last week’s News Corporation AGM in Los Angeles.

A spokesman for the prince told the Financial Times on Tuesday: “We never vote against our partner Mr Murdoch.” This was faithfully reproduced by Darren Davidson in The Australian later that day.

This followed Monday’s Crikey story pointing out that it was mathematically impossible for bin Talal to have followed Murdoch’s advice and voted against a shareholder resolution calling for an end to the company gerrymander, which denies a vote to almost 70% of the shares on issue.

Obviously, the prince is in control of his votes and is the only one who can declare what he has done in the past and will do in the future. However, the eight-word statement by his unnamed spokesman quite clearly did not explicitly say, “We voted our 6.6% stake against Proposal number 6” (see page 65 of the proxy statement). Indeed, it does look like the prince voted in favour of Rupert’s re-election.

I asserted that bin Talal had voted in favour of the gerrymander-busting resolution because the combined 92 million Murdoch-Saudi voting bloc is more than 86 million votes against the proposal.

It is mathematically possible that he failed to vote at all on the resolution. However, the overall turnout was a surprisingly high 83.5%, with 167 million votes on the gerrymander resolution out of the 200 million voting shares on issue.

If the prince hadn’t voted his 13.18 million shares, the turnout would have been an extraordinarily high 89.4%, which just doesn’t seem right.

It is not possible that the prince has sold down his interest because the record date for AGM voting was September 16, and he was listed as still having the 6.6% voting power in the 2014 proxy statement as of September 11.

However, he could very well have lent the stock or voting rights to a party who then voted in favour of the resolution. Of all the scenarios, this one is quite plausible.

“After 61 years of iron-fisted control over News Corp, this is a very serious challenge to Rupert and one that he will no doubt be plotting to ensure is not repeated at next year’s AGM.”

When I asked News Corp audit committee chairman Peter Barnes before the AGM how the second biggest shareholder, Southeastern Asset Management, had voted its 12.7% stake on all resolutions, he said it wasn’t clear. This probably reflects that institutional votes are often lodged on bloc through custody firms so it is not clear how the individual beneficial owners have voted.

Given all this, I still reckon it is almost certain that the 13.18 million News Corp votes controlled by the Saudi Royal family were voted in favour of ending Rupert’s gerrymander last Friday morning.

It could well have been an accident, with the prince just donkey voting in favour of all resolutions down the page, not realising that the board was urging a vote against the last item of business.

At the end of the day, the only way this situation can be cleared up is if Rupert and bin Talal agree to issue a public statement explaining precisely what happened.

This could all have been sorted out at the AGM if Rupert had followed standard governance practice by displaying the proxies in the Zanuck Theatre and allowing shareholders to ask more than two questions.

I’d have been straight on my feet asking whether the prince had voted to end the gerrymander and how the board intended to respond to the 47.5% vote in favour of a “one vote, one value” ownership structure at News Corp.

Instead, I’ve been getting demands for a correction from Rupert’s media writer at The Australian, Darren Davidson, when the facts simply don’t warrant one at this point.

History will forever show that 79 million shares were voted to end the gerrymander, which is more than the 78.72 million votes controlled by the Murdoch family.

After 61 years of iron-fisted control over News Corp, this is a very serious challenge to Rupert and one that he will no doubt be plotting to ensure is not repeated at next year’s AGM.

Could there be a buyback of voting shares? Will a friendly third party snap up a 15% stake, which is possible as the existing poison pill freezes the Murdochs at 39.4% until June next year?

Or does bin Talal get feted by Rupert with more joint ventures and book deals, such that he promises to ensure his 6.6% stake never again diverts from the how-to-vote card issued by the board? Watch this space.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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