Newspaper article The Evening Standard (London, England)

Watchdog Announces Inquiry Putting BSkyB Deal in Doubt

Newspaper article The Evening Standard (London, England)

Watchdog Announces Inquiry Putting BSkyB Deal in Doubt

Article excerpt

Byline: Gideon Spanier, Jonathan Prynn and Nicolas Cecil

RUPERT MURDOCH'S hopes of owning BSkyB outright suffered a blow today when Ofcom announced it would investigate his media empire.

The broadcasting regulator indicated that a "fit-and-proper" test of ethics at News Corp was "highly likely".

The disclosure followed BSkyB boss James Murdoch's extraordinary admission that he sanctioned pay-offs to "cover-up" criminal phone-hacking at the News of the World. He then said he was not in possession of the full facts.

The Liberal Democrats questioned whether BSkyB should be stripped of its broadcasting licence.

Deputy leader Simon Hughes wrote to Ofcom asking it to consider whether the company could continue broadcasting to the nation with Mr Murdoch's son, James, at its helm. Shares in BSkyB had earlier tumbled as analysts slashed the odds of News Corp pulling off its [pounds sterling]8 billion takeover of the satellite broadcaster.

At their worst point the shares were down 47.5p to 764.5p, their lowest level since February.

James Murdoch rushed to the News International's headquarters in Wapping as senior executives struggled to contain the most damaging crisis to hit the family's vast business empire.

Until this week it had been widely assumed that Culture Secretary Jeremy Hunt would wave through the News Corp takeover after BSkyB pledged to hive off its Sky News arm.

Labour leader Ed Miliband said David Cameron should now refer the takeover bid to the independent Competition Commission rather than "rely on an insider, cosy process" led by Mr Hunt".

The Prime Minister insisted Mr Hunt was following "the proper legal processes and procedures". He added: "What we have in this country is proper bodies to look at competition, plurality, fitness and properness. They must all do their job, based on the relevant and up-to-date information."

Mr Hunt has already said his decision will be delayed until September because of the unprecedented deluge of submissions to the public consultation.

His office is thought to have received up to 200,000.

In his letter to Ofcom, Mr Hughes highlighted allegations made in the Commons by Labour MP Tom Watson against James Murdoch, who is also chairman of News International, which owns the News of The World. …

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