As Shareholder Meeting Arrives, News Corp. Settles with Dowler Family

Deal Over Claims That Tabloid Hacked Phone of Missing Teen

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Milly Dowler
Milly Dowler

News Corp.'s U.K. unit News International said it has agreed to pay 3 million pounds ($4.78 million) to settle claims that its News of the World tabloid hacked the mobile-phone messages of schoolgirl Milly Dowler, who was murdered in 2002.

The outline of the settlement was first reported in September, but the Dowler family had not signed off yet.

News Corp.'s announcement of a completed settlement comes the same day as a shareholders' meeting that 's expected to be contentious. Some investors have said they will vote against the re-election of many of the company's board members, although the Murdoch family controls 40% of the voting shares and still has other allies among shareholders.

The settlement includes a 2 million-pound payment to the Dowler family and a 1 million-pound donation to charity, News International said. News Corp. Chairman Rupert Murdoch, 80, was personally involved in the negotiations, a person familiar with the matter said last month.

"When I met with the Dowlers in July, I expressed how deeply sorry I was for the hurt we had caused this family," Murdoch said in the statement. "The behavior that the News of the World exhibited towards the Dowlers was abhorrent and I hope this donation underscores my regret for the company's role in this awful event."

Reports in July that Milly Dowler's messages had been intercepted triggered a public outcry that led News Corp. to close the 168-year-old News of the World and drop its bid for full control of British Sky Broadcasting Group. A Parliamentary committee has recalled News Corp. Deputy Chief Operating Officer James Murdoch to answer more questions after former executives questioned his testimony about his knowledge of the extent of hacking at the News of the World. Les Hinton, who was chairman of News International from 1995 to 2007 and then became publisher of The Wall Street Journal, is scheduled to answer questions from Parliament this Monday.

The publisher of The Wall Street Journal Europe also resigned last week amid scrutiny of the paper's circulation practices.

-- Bloomberg News --

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