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Tuesday, August 7, 2012

Church of England shuns News Corp. over phone hacking

Rupert Murdoch, chief executive of News Corp.
The Church of England on Tuesday sold its shares of News Corp., the company controlled by Rupert Murdoch. The church said its ethical investment advisors had urged reforms, which News Corp. failed to implement. (Peter Macdiarmid / Getty Images)
Now even the Church of England has pulled its support.

Tuesday, the Church of England announced that it had sold its holdings in Rupert Murdoch's media conglomerate, News Corp., "on the advice of the Church's Ethical Investment Advisory Group."
The church and its pension board held a relatively small stake in the New York-based media company, shares worth about $2.5 million. Still, the divestiture could loom large in spiritual and symbolic terms.

In a news release, the church said it tried to counsel News Corp. executives with the hope that they would reform their business practices. Conversations began last year in the wake of the phone-hacking scandal that roiled Britain's police and political establishment, in addition to the leadership of News Corp. and its British newspaper arm.

"After a year of dialogue between the company and the Ethical Investment Advisory Group, the Church of England was not satisfied that News Corporation had shown, or is likely in the immediate future to show, a commitment to implement necessary corporate governance reform," the church said in a statement.

More than 60 people have been arrested in connection with police investigations of bribery of government officials and phone hacking that was most acute at News Corp.'s now-shuttered tabloid, News of the World.

"Last year's phone-hacking allegations raised some serious concerns amongst the church's investing bodies about our holding in News Corporation," Andrew Brown, secretary of the Church Commissioners, said in a statement.

"Our decision to disinvest was not one taken lightly and follows a year of continuous dialogue with the company, during which the EIAG put forward a number of recommendations around how corporate governance structures at News Corporation could be improved," Brown said. He did not divulge what reforms the church had been seeking.

"However the EIAG does not feel that the company has brought about sufficient change and we have accepted its advice to disinvest," Brown said.

In addition to News Corp., the church said it shuns investments in companies "involved in military products and services, pornography, alcoholic drinks, gambling, tobacco, human embryonic cloning and high interest rate lending."

News Corp. declined to comment.

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