News Corporation has agreed to a $139m (?91.2m) settlement of a legal action by the company's shareholders. They claimed in a lawsuit that the board had turned a blind eye to phone hacking at the News of the World.
Insurance covering News Corp's board, including chairman Rupert Murdoch, will fund the settlement that sought to hold directors accountable for the scandal.
A joint statement by the company and the shareholders stated that the money - said to be the largest cash settlement in a derivative lawsuit - will go into the company's funds rather than to individual investors.
The lawsuit also related to News Corp's ?415m acquisition of Shine Group, the media company previously owned by Murdoch's daughter, Elisabeth, in 2011.
According to Delaware chancery court filings, News Corp agreed as part of the settlement to tighten up the oversight of the company's operations and to set up an anonymous whistle-blower's hotline for tips about misconduct.
Shareholders who sued had alleged that the board's lax oversight allowed wrongdoing to flourish at the company and harmed its stock price.
In its suit, Amalgamated Bank claimed that some board members knew as early as 2009 that News of the World reporters routinely hacked into phones and bribed British police for stories.
That allegation about a cover-up was hotly disputed by News Corp's lawyers at a hearing last year in Delaware. They denied that board members had participated in a cover-up because they were beholden to Murdoch and his family.
"Rather than ignoring and covering up these matters, the evidence shows the board moved to address the scandal quickly and openly," a News Corp attorney told the court.
Amalgamated Bank greeted the settlement by issuing a statement in which its CEO, Edward Grebow, said: "We are proud of this historic settlement, which continues the 20-year-history of Amalgamated Bank encouraging corporate reform and improved corporate governance."
Based in New York, Amalgamated is the largest union-owned bank in the US, and holds more than 455,000 News Corp shares through its trusteeship of LongView Funds. Its action was supported by the Central Labourers Pension Fund and City of New Orleans Employees' Retirement System,
The settlement, which is still subject to approval by the Delaware court, is part of News Corp's push to put the hacking scandal to one side. As company spokesman Nathaniel Brown said: "We are pleased to have resolved this matter."
Sources: Delaware Court of Chancery/Amalgamated Bank/News Corp/Bloomberg/Business Wire
Source: http://www.guardian.co.uk/media/greenslade/2013/apr/22/news-corporation-usa
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