July 18, 2011
BRITAIN NEWS - After the arrest of Rebekah Brooks, the bygone chief executive of Rupert Murdock’s News International and phone hacking scandal, shares of News Corporation, the parent company owned by Australian billionaire Rupert Murdoch have slide down to 6% to a record low.
News Corp owns two major newspapers in Britain, The Sun and the now closed News of the World. In afternoon trading, the shares saw a rapid downfall and slide down 5.5% at 13.91 Australian dollars (£9.20).
Analysts predict the scandal in British media is responsible for this damage to the company. The company has lost about 19% of its total value of its business.
"You're now looking at [about] 10 billion dollars wiped off the value since the peak," said Stephen Mayne, director of the Australian Shareholders' Association.
News Corp is a media mogul which owns four major newspapers in Britain; The Sun, the News of the World, The Times and Sunday Times. The now closed News International ex chief executive was arrested by Scotland Yard investigating the phone hacking scandal. Brooks, who resigned last week, denied the involvement in phone hacking by journalists. She was arrested on the basis of ground as an editor, she would have been expected to authorize bribe police officers and know the phone hacking by journalists to get a scoop.
In another twist, Metropolitan Police Commissioner Sir Paul Stephenson resigned from his job for his part in the scandal. He was criticized for hiring former News of the World reporter Neil Wallis as a phone hacking advisor.
It is also in contemplation within the directors of the company to change the leadership. They called it a “gathering storm” after tumultuous share fall and recent row of scandals in the media.
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