Don Foster MP

News

Foster puts further pressure on Ofcom to investigate if Murdoch empire ‘fit and proper’ to own 39% of BSkyB

July 18, 2023 by admin in News

Don Foster MP, the Liberal Democrat Media Spokesperson has written to Ofcom urging them to investigate whether the Murdoch empire is “fit and proper” to own a 39% stake in BSkyB.

The letter was co-signed by Deputy Leader of the Liberal Democrats, Simon Hughes MP and Tim Farron MP, Liberal Democrat Party President.

The letter challenges Ofcom to investigate the conduct of News Corporation and its associated companies, arguing that News Corp control over BSkyB makes this a relevant cause for concern.

Citing a lack of substantial action from Ofcom given the evident public concern surrounding News International’s activities of the last two weeks, the letter calls for Ofcom to not wait, but take measures immediately to establish that the owners of the BSkyB licence are ‘fit and proper’ persons.

Commenting, Don Foster stated:

“It is in the public interest that Ofcom undertakes an immediate investigation to establish whether the licence holders at News Corp remain “fit and proper”.

“Ofcom is reluctant to act while the police are investigating but they shouldn’t wait. There have already been enough admissions of wrongdoing and there is no legal reason to stop Ofcom from getting started now.

“Even if senior executives are not criminally culpable, Ofcom should still investigate News Corporation’s massive management failures. News Corporation’s inability to run its shop properly makes it unfit to hold the BSkyB broadcast licence.”

ENDS

Notes to editor:

The Full letter is copied below:

Ed Richards Esq.,
Chief Executive,
Ofcom,

15 July 2023

We refer to your reply, dated 8July, to our letter of the same date, where you confirmed that Ofcom has a continuing duty under the Broadcasting Act to be satisfied that any person holding a broadcasting licence (including controlling directors and shareholders) remains a ‘fit and proper person’ to hold those licences. We wish to respond to two key points you make in your letter.

News Corporation management and control of BSkyB and News International

You say in your letter:

“In considering whether any licensee remains a ‘fit and proper person’ to hold broadcasting licences Ofcom will consider any relevant conduct of those who manage and control such a licence.”

It remains the case that News Corporation has a 39.1% shareholding in BSkyB.

In its report on the acquisition by BSkyB of 17.9% of the shares in ITV plc, the Competition Commission concluded that BSkyB had “acquired the ability materially to influence the policy of ITV”. Though that finding was in the context of assessing common control for the purposes of the Enterprise Act 2002, it is nevertheless relevant that, in coming to its conclusion, the Competition Commission judged that the size of the BSkyB
shareholding gave it the ability to influence the policy of ITV, including “the strategic direction of the company and its ability to define and achieve its objectives.”

It must therefore be fair to conclude that, with a 39% shareholding, News Corporation is even more strongly placed materially to influence the policy and strategic direction of BSkyB.

This conclusion is given added force by the 1990 Broadcasting Act (Schedule 2, paragraph 1(3)(b)) which states that a person controls a body
corporate if “although he does not have such an interest [i.e. more than 50%] in the body, it is reasonable, having regard to all the circumstances, to expect that he will be able, by whatever means and whether directly or indirectly, to achieve the result that the affairs of the body are conducted in accordance with his wishes”

The overlapping relationships between News Corporation and News International, and News Corporation and BSkyB, provide further evidence of this level of control:

  • James Murdoch acts as CEO and Chairman of News Corporation Europe and Asia, and as non-executive Chairman of BSkyB
  • Tom Mockridge is a non-executive director of BSkyB, but also oversees News Corporation’s television operations in Europe. This morning it was announced that he is the new Chief Executive of News International.
  • David F. Devoe is Chief Financial Officer of News Corporation and a board member of BSkyB
  • David Evans is described on the BSkyB website as an “Independent Non-Executive Director”, but one who has held “various senior roles at News Corporation”.
  • Arthur Siskind is Senior Adviser to the Chairman of News Corporation, Rupert Murdoch, and a board member of BSkyB

Do you accept that the conduct of News Corporation and its associated companies are a cause for concern, considering the control they exercise over BSkyB?

The police investigation and ‘fit and proper’

In your reply to us you say:

“It is not for Ofcom to investigate matters which properly lie in the hands of other authorities, such as the police and the criminal or civil courts, and clearly we cannot and should not act whilst allegations are unsubstantiated.”

You rightly do not want to prejudice the ongoing police investigation or the newly announced judicial inquiry. But we see no reason why Ofcom should at any time be precluded from meeting its continuing duty to ensure all licence holders are ‘fit and proper’.

Do you agree that:

  • there is no reason why Ofcom cannot now conduct the investigation that it is required by law to undertake to fulfil its continuing duty to ensure that BSkyB is a fit and proper person to hold a licence?;
  • there are no legal reasons to stop Ofcom from conducting its work alongside that done by the police?;
  • there have already been enough convictions, apologies and resignations - including today’s resignation of Rebekah Brooks, the News International Chief Executive - to justify a full and proper investigation by Ofcom, without waiting for the results of police investigations?;
  • a finding against the holders of the BSkyB licence does not rest on securing further criminal convictions, and that, even if senior executives are not criminally culpable, Ofcom must still consider serious management failures which may indicate that BSkyB are not ‘fit and proper’ to hold a broadcast licence?

You say in your reply to us that Ofcom is ‘monitoring the situation‘. Ofcom has a continuous duty to monitor the situation anyway. We are concerned that you have taken any substantial steps since the developments of the past two weeks.

Given the manifest public concern about News International’s activities, the close integration of News International with its parent company News Corporation, News Corp’s effective control of BSkyB, and that the police investigation, while relevant, does not have to dictate the timescales of your
own work, we believe that you should take measures now to satisfy yourself that the owners of the BSkyB licence continue to be ‘fit and proper’ persons.

These are clearly matters of enormous public interest. We seek the confirmation that you and your colleagues at Ofcom will now give them the serious consideration they merit.

We look forward to hearing from you again.

Rt Hon Simon Hughes MP, Deputy Leader of the Liberal Democrats

Rt Hon Don Foster MP, Liberal Democrat Media Spokesman

Tim Farron MP, Liberal Democrat Party President