A group of investors has sued the News Corp in Delaware Chancery Court, seeking to undo a "poison pill" defense the company created to fend off the advances of the Liberty Media Corp, its largest outside shareholder.
If the lawsuit is successful, it will add intrigue to the corporate fandango between Rupert Murdoch, who controls News Corp, and John Malone, Liberty's chairman. Murdoch put the poison pill in place to stymie pressure from Malone to force News Corp to sell some of its assets to Liberty.
The lawsuit was brought by investors in Australia, the UK, the Netherlands and the US. It accuses News Corp of breach of contract, fraud and misrepresenting itself when it sought and received approval from investors last year to move to the US from Australia.
The lawsuit, filed on Thursday, was announced on Friday by the plaintiffs. It also names the company's directors, including Murdoch's son Lachlan, who recently resigned from his executive role at the News Corp but who took an active role in the relocation.
Gary Ginsberg, a News Corp spokesman, said the lawsuit was a nuisance and without merit. He said the shareholders suing -- including seven Australian pension funds, the pension fund for Dutch government employees, and Connecticut Retirement Plans -- represent a small fraction of the company's outstanding shares.
At issue is a promise News Corp made to shareholders who wanted to preserve an Australian legal requirement that companies need shareholder approval to adopt poison pills.
A poison pill is a mechanism that makes it effectively impossible for a shareholder to increase a stake in a company beyond a set threshold -- in News Corp's case, 15 percent. News Corp owns the New York Post, the Fox TV network and 20th Century Fox studio.
The lawsuit notes that the company obtained significant shareholder approvals for the move to the US: more than 75 percent of the shares in both classes of its stock and more than 50 percent of the shareholders who voted.
Murdoch's family interests, which control 29.5 percent of the company's votes, were excluded from the tally.
As part of its successful effort to persuade investors, Murdoch's company agreed to make it board policy that shareholder approval would be required for a poison pill to be in place for more than one year. The relocation was approved at the company's annual meeting in October last year and took place on Nov. 3.
That policy was quickly put to the test a few days after the company moved. Malone increased his voting stake in News Corp to 17 percent from 9 percent, and a poison pill was then adopted.
The lawsuit arose after the company announced in a regulatory filing on Aug. 10 this year that the board had extended the pill for two more years. At the time, Murdoch said that he had lived up to the obligation he had made to investors before the relocation, but that the board had later changed its policy.
Ginsberg repeated that position on Friday and said a shareholder vote was unnecessary for such a policy move.
"We were very clear from the get-go," he said. "There is no fraud; we always said it was a board policy."
Charles Elson, a professor and corporate governance specialist at the University of Delaware, said News Corp was correct that a board policy could be changed without shareholder approval.
"That's the difference between a policy and a bylaw," he said.
Elson said, however, that the investors might have a case if they could prove that the company misled them about its intentions for the policy.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
STILL UNCLEAR: Several aspects of the policy still need to be clarified, such as whether the exemptions would expand to related products, PwC Taiwan warned The TAIEX surged yesterday, led by gains in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after US President Donald Trump announced a sweeping 100 percent tariff on imported semiconductors — while exempting companies operating or building plants in the US, which includes TSMC. The benchmark index jumped 556.41 points, or 2.37 percent, to close at 24,003.77, breaching the 24,000-point level and hitting its highest close this year, Taiwan Stock Exchange (TWSE) data showed. TSMC rose NT$55, or 4.89 percent, to close at a record NT$1,180, as the company is already investing heavily in a multibillion-dollar plant in Arizona that led investors to assume
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
RSS