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News Corp shares hit two-year low on hacking arrest News Corp shares fall as pressure grows
(40 minutes later)
Shares in Rupert Murdoch's News Corporation have dropped by 7.6% to a two-year low. Shares in News Corporation have fallen 4.3% in New York as the company comes under further pressure as the phone hacking scandal develops.
Shares touched A$13.65 in Sydney before closing down 4.1%. Earlier, News Corp shares in Sydney dropped by 7.6% to a two-year low.
Separately, the US Department of Justice has spoken to the UK's Serious Fraud Office about how to investigate claims the News of the World paid police for information. The US Department of Justice has spoken to the UK's Serious Fraud Office about how to investigate claims the News of the World paid police for information.
And a decision is expected by the end of the week on whether James Murdoch should stay as BSkyB chairman.And a decision is expected by the end of the week on whether James Murdoch should stay as BSkyB chairman.
James Murdoch is deputy chief operating officer at News Corporation and heads their operations in Europe and Asia.James Murdoch is deputy chief operating officer at News Corporation and heads their operations in Europe and Asia.
There is a growing view among non-executives at broadcaster BSkyB that the burden of "fighting the fires" at News Corp means that he will find it hard to devote enough time to chairing BSkyB, BBC business editor Robert Peston said.There is a growing view among non-executives at broadcaster BSkyB that the burden of "fighting the fires" at News Corp means that he will find it hard to devote enough time to chairing BSkyB, BBC business editor Robert Peston said.
But he added that if Mr Murdoch were asked to step aside, it would likely be for only a temporary period.But he added that if Mr Murdoch were asked to step aside, it would likely be for only a temporary period.
Investigations?Investigations?
The US Department of Justice's interest in News Corp stems from the fact that its headquarters are in New York, but its shares are listed in both the US and Australia.The US Department of Justice's interest in News Corp stems from the fact that its headquarters are in New York, but its shares are listed in both the US and Australia.
It is illegal for any US company to pay bribes to overseas officials, under the Foreign Corrupt Practices Act.It is illegal for any US company to pay bribes to overseas officials, under the Foreign Corrupt Practices Act.
Robert Peston said the Department of Justice had not yet launched a formal investigation, but its conversations with the Serious Fraud Office (SFO) showed that it was actively considering whether it needed to launch such an investigation.Robert Peston said the Department of Justice had not yet launched a formal investigation, but its conversations with the Serious Fraud Office (SFO) showed that it was actively considering whether it needed to launch such an investigation.
The SFO also confirmed that it had received a letter from Labour MP Tom Watson calling on it to investigate "certain allegations relating to News Corp".The SFO also confirmed that it had received a letter from Labour MP Tom Watson calling on it to investigate "certain allegations relating to News Corp".
"SFO director Richard Alderman will give full consideration to Mr Watson's letter," a statement said."SFO director Richard Alderman will give full consideration to Mr Watson's letter," a statement said.
Leadership change?Leadership change?
Earlier, shares touched a two-year low of A$13.65 in Sydney, before closing down 4.1%.
The slide in News Corp's share price comes as an investigation into phone hacking in the UK widens.The slide in News Corp's share price comes as an investigation into phone hacking in the UK widens.
News Corp's stock has now lost almost a fifth of its value since the start of July, with the share price of its common stock in New York falling from $18.50 to $16.09.News Corp's stock has now lost almost a fifth of its value since the start of July, with the share price of its common stock in New York falling from $18.50 to $16.09.
Analysts say the events of the past few days have caused major damage to the company, as 19% of its total value has evaporated.Analysts say the events of the past few days have caused major damage to the company, as 19% of its total value has evaporated.
"You're now looking at [about] $10bn wiped off the value since the peak," said Stephen Mayne, director of the Australian Shareholders' Association."You're now looking at [about] $10bn wiped off the value since the peak," said Stephen Mayne, director of the Australian Shareholders' Association.
Mr Mayne also said that independent directors at the firm have been discussing a change in leadership.Mr Mayne also said that independent directors at the firm have been discussing a change in leadership.
"The shareholder pressure, particularly today's tumultuous fall on Australian markets after the amazing developments over the weekend, is clearly showing that this is a gathering storm," he said."The shareholder pressure, particularly today's tumultuous fall on Australian markets after the amazing developments over the weekend, is clearly showing that this is a gathering storm," he said.
Although some reports suggest this may not be the case.Although some reports suggest this may not be the case.
Tom Perkins, who is on the board of News Corp, denied that any such discussions were taking place in an emailed response to Reuters news agency.Tom Perkins, who is on the board of News Corp, denied that any such discussions were taking place in an emailed response to Reuters news agency.
Widening probeWidening probe
News Corporation is the parent company of News International, which runs the Sun, the Times and Sunday Times. Their sister paper, the News of the World, was shut down earlier this month as a result of the phone hacking scandal.News Corporation is the parent company of News International, which runs the Sun, the Times and Sunday Times. Their sister paper, the News of the World, was shut down earlier this month as a result of the phone hacking scandal.
On Sunday, ex-News International chief executive Rebekah Brooks was arrested by police in the UK on suspicion of conspiring to intercept communications and on suspicion of corruption.On Sunday, ex-News International chief executive Rebekah Brooks was arrested by police in the UK on suspicion of conspiring to intercept communications and on suspicion of corruption.
Mrs Brooks has denied wrongdoing, and was released on bail at midnight (2300 GMT).Mrs Brooks has denied wrongdoing, and was released on bail at midnight (2300 GMT).
Her spokesman said she was still happy to appear before the UK Parliament's Culture, Media and Sport Committee on Tuesday.Her spokesman said she was still happy to appear before the UK Parliament's Culture, Media and Sport Committee on Tuesday.
Rupert and James Murdoch are also to appear before the MPs.Rupert and James Murdoch are also to appear before the MPs.
In another twist, it was announced on Monday that Metropolitan Police Assistant Commissioner John Yates had resigned, as the Metropolitan Police Service continues to be criticised for its handling of the phone hacking scandal.In another twist, it was announced on Monday that Metropolitan Police Assistant Commissioner John Yates had resigned, as the Metropolitan Police Service continues to be criticised for its handling of the phone hacking scandal.
His departure comes a day after his boss, Commissioner Sir Paul Stephenson, also announced he was standing down.His departure comes a day after his boss, Commissioner Sir Paul Stephenson, also announced he was standing down.
Sir Paul, Britain's most senior police officer, was criticised for hiring former News of the World executive Neil Wallis - who was questioned by police as part of the probe into hacking - as an adviser.Sir Paul, Britain's most senior police officer, was criticised for hiring former News of the World executive Neil Wallis - who was questioned by police as part of the probe into hacking - as an adviser.