James Murdoch’s problems could touch more than one company

By Laurie Bennett

November 9, 2011 at 8:03am

The ongoing questioning of James Murdoch, scheduled to resume Thursday at Westminster, is a potential embarrassment to more than News Corp.

Murdoch is expected to be confronted with tough questions about his knowledge of the phone hacking scandals that have swept the media conglomerate, headed by his father, Rupert Murdoch. At issue is the truthfulness of his testimony in July, when he said he had learned of the hacking only recently.

As deputy chief operating officer and a director, James Murdoch poses yet another set of potential problems for News Corp.

But at a time when corporate governance is under scrutiny, his reach extends to three other major enterprises.

Murdoch, 38, is a director of the British pharmaceuticals firm, GlaxoSmithKline, Sotheby’s auction house and Yankee Global Enterprises, the holding company for the New York Yankees.

All three have borne their share of notoriety. The problems of a single director won’t likely have a major impact, although they could lead to some board reshuffling.

Still, publicly traded companies such as GlaxoSmithKline and Sotheby prefer to avoid any taint of bad publicity.

Sotheby’s had to endure more than most a decade ago, when its former chairman and principal owner, A. Alfred Taubman, was convicted of price-fixing with competitor Christie’s. Taubman was sentenced to a year and a day in prison and a $7.5 million fine.

GlaxoSmithKline last year agreed to pay $750 million to settle complaints that it had knowingly sold ineffective and contaminated products.

And then there’s the Yankees.

The Murdochs might do well to seek counsel from the Steinbrenners, who have decades of experience in dealing with bad boys.

And James Murdoch, for all his possible shenanigans in the office, is no A-Rod.

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