The British Government will support the opposition Labour party to urge News Corp to drop the bid to take over the pay-TV company British Sky Broadcasting Group PLC. The provider has a total market of $19.2 Billion.
BSkyB was alleged to have hacked into mobile-phone mailboxes to obtain information. The Chairman and Chief Executive of News Corp Rupert Murdoch, his son and Deputy Chief Operating Officer James Murdoch were asked to appear before the parliamentary committee to question about the scandal. News Corp also agreed to co-operate.
News Corp has been fighting to get back its BSkyB bid, which took a further toll when the government said it would extend its support to the opposition party to withdraw the bid. Finally the decision lays on the hands of Jeremy Hunt, the government minister. Polls indicate that public are against the takeover of BSkyB and display the depth of anger they have.
Mr. Hunt wanted to approve the BSkyB deal several weeks ago but after the allegations that voice mails of the murdered child and British troops families have been hacked, he has become opposing and critical of the News Corp.
Adding to their fall, BSkyB shares closed at $11.02, which is down by 3.6% in London trading. The company’s officials appeared before the parliamentary committee in two occasions. One of which involved Les Hinton, who aided Mr. Murdoch for a long time, when the phone hacking allegations began.
Mr. Murdoch stated that the parliamentary committee has been misled and have not considered all the facts. The company officials are being put to continuous questioning and investigation. U.S. Senate Commerce Committee chairman Jay Rockefeller told the reporters that News Corp phone hacking allegations has led to serious questions about whether BSkyB had broken the U.S. law and has urged the issue to be investigated thoroughly.
