UK regulators have deemed British Sky Broadcasting (BSkyB) a "fit and proper" company to hold an operating license but slammed former chairman James Murdoch for his handling of the phone hacking scandal.
Ofcom, Britain's media regulator, said there was no evidence linking the pay-TV firm — 39 percent owned by News Corp. — to phone hacking at the tabloid News of the World, according to Reuters.
Nor did it assert that James Murdoch — son of media mogul Rupert Murdoch, News Corp. deputy chief operating officer and former Sky and News International chairman — was complicit in a cover-up of phone hacking, The Independent wrote.
However, it pointed to his failure to uncover the problems at News of the World earlier and criticized him for his "lack of action" over the phone-hacking affair that led to the News International newspaper's closure in July 2011.
Ofcom — which has clashed repeatedly with BSkyB in the past — reportedly said:
"We consider James Murdoch's conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged."
However, the Guardian quoted the regulator as saying:
"To date, there is no evidence that Sky was directly or indirectly involved in any of the wrongdoing either admitted or alleged to have taken place at News of the World or The Sun."
"Whilst we consider that James Murdoch's conduct in various instances fell short of the standard to be expected of the chief executive officer and chairman, we do not find that James Murdoch's retention as a non-executive director of Sky means that Sky is not fit and proper to hold broadcast licenses. We recognize that whether it is appropriate for James Murdoch to be a director in light of the events is a matter for the board and shareholders of Sky."
Ofcom said there were no grounds to conclude that Rupert Murdoch had acted inappropriately.
News Corp. issued a response to the ruling on Thursday, saying that while it was "pleased," it disagreed "with certain of the report’s statements about James Murdoch’s prior actions as an executive and director."
The Hollywood Reporter quoted a News Corp. statement as saying:
"We are pleased that Ofcom recognizes BSkyB as a fit and proper holder of a broadcast license and remain proud of both News Corp.’s and James Murdoch’s distinguished record in facilitating the transformation of Sky into Britain’s leading pay television and home communications provider."
Ofcom's investigation had raised the prospect that News Corp. would be forced to sell down some of its holding in BSkyB.