News Corp limits foreigners' share voting rights as US flub comes to light
Another embarrassment for US-based News Corp. The company said today it was suspending half the voting rights of its non-American shareholders because their ownership of the company's class B voting shares had zoomed to 36 per cent - way beyond what the US allows.
Rupert Murdoch: American citizen
US regulations on foreign ownership limit the ownership and voting power of foreign investors in American broadcasters to 25 per cent.
The company’s board has now approved an immediate suspension of 50 percent of foreign shareholders’ voting rights.
As American citizens, Australian-born Rupert Murdoch and members of his family are not foreign investors. But with 39.7 percent of the company’s voting shares, the family will cap its vote so as to not effectively increase its voting stake during the suspension, the company said.
One major foreign investor is Prince Alwaleed bin Talal of Saudi Arabia, who owns roughly 7 percent of voting stock.
News Corporation has 27 television stations in the US, most of them affiliated with the company-owned Fox Broadcasting. Last year, the company’s television business brought in $4.8 billion in revenue and $681 million operating profit.
It was not clear how the breach came about. The Wall Street Journal quoted a media lawyer as saying that broadcasters had to closely monitor ownership of their stock to ensure that the level held by foreign investors didn't rise above mandated limits. It could not be learned when News Corp. last surveyed its shareholders.