Tuesday 18 October 2016

SKY investors not in favour of James Murdoch's appointment as a Chairman

James Murdoch

Sky insisting that James Murdoch is the potential candidate to be appointed as a next Chairman.

More than 28 per cent of votes were cast against him at the blue chip company's annual meeting amid corporate governance concerns.

Murdoch returned as chairman in January after a four-year absence having stood down following the phone hacking scandal at News International, where he was also chairman.

He is chief executive of movie maker 21st Century Fox, which owns more than 39 per cent of Sky and is seen as a potential bidder.

Piers Hillier, chief investment officer at Royal London Asset Management, owner of £51.5million of Sky's shares, said: "We continue to believe that James Murdoch's re-appointment as chairman of Sky is inappropriate. Should Fox make a bid for Sky, investors need a strong independent chairman to protect the interests of minority shareholders and negotiate the best possible deal.

"No attempts were made to advertise the position externally, or appoint an agency, which goes against the UK corporate governance code."

Sky acknowledged the "significant" vote against Murdoch's re-election and said it is "aware some proxy advisory services recommended that shareholders vote against his election on the basis that he is not independent".

But the company argued: "The board's decision to re-appoint James was unanimous and recognised that he is an experienced executive with extensive knowledge of the international media industry and has been a strong contributor to Sky since he joined the board in 2003.

"The board is confident that with the appointment of Martin Gilbert as deputy chairman and Andrew Sukawaty as senior independent director, there are strong governance processes to protect the interests of independent shareholders."

It is understood eight out of the company's top 10 UK shareholders backed Murdoch's re-election.

Opposition has come mainly from US-based investors.

The AGM vote followed Sky's quarterly results showing a 7 per cent rise in revenue to £3.1billion as it signed up over 100,000 new customers, with its highest first-quarter customer growth in Italy for four years. Shares fell 16½p to 848p.



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