As the leaders of all three major political parties appeared to join forces in opposition to Rupert Murdoch's bid to acquire complete ownership of BSkyB, Britain's largest commercial broadcaster, Murdoch's News Corporation today (Wednesday) suddenly withdrew its bid. In a statement, News Corp President and COO Chase Carey said, "We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate." On its website, The New York Times described the news as "a stunning reversal" for Murdoch, who was apparently prepared to spend $12 billion on the takeover until the bid was derailed by reports that his London tabloid, News of the World , had engaged in illegal phone hacking to obtain personal information about hundreds, perhaps, thousands of people. In an apparent effort to rescue the BSkyB deal from the fallout, News Corp last week shut down the 168-year-old newspaper. Earlier today, Murdoch appeared to lose the support of Prime Minister David Cameron, whom he had backed in last year's general election. Speaking to Parliament, Cameron urged Murdoch to withdraw his bid. "Stop the business of mergers and get on with cleaning the stables," he said. Cameron then announced that he had appointed a senior judge, Lord Justice Leveson, to head an official investigation into "the extent of unlawful or improper conduct within News International and other newspaper organizations" and to develop recommendations on a "more effective policy and regulatory regime which supports the integrity and freedom of the press ... while encouraging the highest ethical and professional standards." But actor Hugh Grant, one of the apparent victims of the News of the World hackers, told Britain's Guardian newspaper, "I'm panicking that despite all the revelations coming out thick and fast, the government, with their history of collusion and obedience to News International, will find a way to make this inquiry insufficient and kick it into the long grass." Meanwhile, more reverberations of the British hacking scandal were felt in the U.S. West Virginia Senator Jay Rockefeller said that it "raises serious questions about whether the company has broken U.S. law, and I encourage the appropriate agencies to investigate." In a related matter, the London Financial Times suggested that News Corp could face scrutiny on its corporate tax structures in the U.S., where the company is now based. The newspaper noted that although the average corporate tax rate in the U.S. is 35 percent, News Corp's last year was 20 percent. The FT cited tax analysts who said that News Corp has been able to keep its tax rates low by capitalizing on low-tax havens (it has 152 subsidiaries in them, according to the GAO), deferring taxes, and accelerating depreciation.

13/07/2011