Business, Economics and Jobs

Australian investors dump News Corp as hacking scandal deepens


Rupert Murdoch, Chairman and CEO of News Corporation, is surrounded by media as he arrives at the Allen & Company Sun Valley Conference on July 7, 2011 in Sun Valley, Idaho.


Scott Olson

Investors punished Rupert Murdoch's News Corp. in trading on the Australian share market Thursday as the media empire fell deeper into a phone hacking scandal in Britain.

The stock slumped 62 cents, or 3.61 percent, to  $16.55 Australian (US$17.78) in a flat market as investors reacted to the latest revelations of phone hacking by News Corp's News of the World newspaper in London.

Already the subject of criminal and parliamentary investigations, the scandal has now triggered an advertiser boycott after it was alleged that Murdoch journalists gained access to the mobile phone data of a missing 13-year-old girl who was subsequently found to have been murdered.

The saga, which has touched dozens of politicians and celebrities, deepened Thursday with claims that Britain's top-selling tabloid may have eavesdropped on phone messages left by relatives of British soldiers killed in Afghanistan.

News shares were the worst performer on Australia's S&P/ASX50's index, a day after the stock shed 60 U.S. cents, or 3.24 percent, on Wall Street, where it closed Wednesday at $US17.94.

Murdoch said the company he built from a provincial Australian newspaper is "committed to addressing these issues fully."

"Recent allegations of phone hacking and making payments to police with respect to the News of the World are deplorable and unacceptable," he said in a statement.

"I have made clear that our company must fully and proactively cooperate with the police in all investigations."

Analysts said the sell-off was overdone, considering how little newspapers contributed to News Corp's revenues.

"There's no doubt that simply due to the profile that Murdoch has, any headline associated with him or his companies will potentially produce an outsized reaction," Fat Prophets senior analyst Greg Fraser told Australian Associated Press.

Prime Minister David Cameron is facing mounting calls to set up a "no holds barred" public inquiry into allegations.