Scandal at News Corp.

Rupert Murdoch, Son James, Brooks Summoned Before Parliament

Analyst Reiterates 'Buy' Rating, Citing Prospect News Corp. Will Exit More Papers

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Rupert Murdoch
Rupert Murdoch

News Corp. Chairman-CEO Rupert Murdoch, his son James and News International CEO Rebekah Brooks have been summoned to appear before U.K. lawmakers to answer questions about the company paying police for stories.

The Murdochs and Ms. Brooks will be asked to attend the Culture, Media and Sport Committee to speak about prior evidence given to the committee, where executives had said News Corp.'s U.K. newspaper unit News International had paid police.

"We have been made aware of the request from the CMS Committee to interview senior executives and will cooperate," News International said in an emailed statement. "We await the formal invitation."

The summons follows accusations that News Corp. staff hacked into the phones of murdered schoolgirl Milly Dowler and terror victims and paid police for stories. That prompted Murdoch to close the 168-year-old News of the World tabloid on which his U.K. media empire was founded. Politicians from all parties have called for his planned purchase of pay-TV broadcaster British Sky Broadcasting Group to be scrapped.

The inquiry will focus on previous evidence given to the committee, lawmaker and committee member Louise Mensch said in a post on her Twitter account today. At a previous hearing Ms. Brooks said London-based News International had paid police for stories. She was editor of News of the World during the hacking that has now caused a firestorm, but says she did not know about it.

James Murdoch
James Murdoch

The opposition Labor Party will call on News Corp. to withdraw its bid for BSkyB during a debate in the British Parliament tomorrow. "Our motion for key House of Commons debate tomorrow: Rupert Murdoch -- withdraw BSkyB bid," Labor leader Ed Miliband said on Twitter today.

Former Prime Minister Gordon Brown this week accused Murdoch's newspapers of using criminals to get stories about him and his family while he was in office. In 2006 Ms. Brooks, by then the editor of News Corp.'s Sun, contacted the Brown family "to tell them that they had obtained details from the medical file of their four-month-old son, Fraser, which revealed his cystic fibrosis," the Guardian reported.

Nomura analyst Michael Nathanson reiterated his "buy" rating on News Corp. stock today, citing "silver linings" to the debacle including the prospects that News Corp. "could look to further reduce its exposure to U.K. newspapers beyond closing News of the World" and that chief operating officer Chase Carey's influence could grow.

News Corp. also increased its existing stock buyback program to $5 billion. Shares declined $1.27, or 7.6%, to $15.48 on Monday, the biggest drop since April 2009.

-- Bloomberg News --

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