Murdoch suffers BSkyB revolt, but hangs on

LONDON, (Reuters) – BSkyB independent  shareholders dealt James Murdoch a heavy blow yesterday with  over 40 percent failing to back his re-election as chairman,  venting their anger at his handling of a phone hacking scandal.

James Murdoch

Several major shareholders told Reuters ahead of  the key annual meeting that they would vote against the  38-year-old because they also want a truly independent chairman  rather than an executive of Rupert Murdoch’s News Corp,  which owns 39 percent of BSkyB.

While James Murdoch was supported by some  shareholders in the room and given strong support by the board,  the result marks his second investor drubbing in just over a  month after he endured a huge protest vote at News Corp in  October.

News Corp had to withdraw its $12 billion offer for BSkyB in  July following revelations that people working for a News Corp  weekend tabloid, the News of the World, had hacked into the  phones of celebrities and murder victims to secure stories.

Results from yesterday’s vote showed investors representing 75  percent of shares backed James Murdoch but excluding the stake  held by his father’s company, support stood at 56 percent with  31 percent opposed to his appointment and 13 percent of votes  withheld.

“He has been given a bloody nose by shareholders in this  vote and there may well be further developments,” Tom Powdrill,  a spokesman for the shareholder advisory group PIRC, said. “He  has clearly lost the support of a large number of the company’s  owners . “

Legal & General, which holds 2.9 percent of the  BSkyB stock and is the fifth-largest shareholder, told Reuters  it had voted against the re-election of James Murdoch. Standard  Life, which owns less that half a percent of the stock, told the  meeting it had also voted against him.