Rupert Murdoch and his News Corp. were sued over claims he is causing the company to pay about $675 million for “nepotism” in its purchase of his daughter's U.K.-based television production company, Shine Group.
The complaint, filed by the $814 million Central Laborers Pension Fund, Jacksonville, Ill., and Amalgamated Bank of New York, claims there is no reason for the purchase other than to reward Elisabeth Murdoch and perpetuate the family's involvement in senior management of the media empire.
The bank sued as trustee for several funds, through which it holds almost 1 million shares of News Corp., according to a complaint filed Wednesday on behalf of the company in Delaware Chancery Court in Wilmington.
The Central Laborers fund also filed a separate complaint seeking to inspect books and records outlining the company's decision to buy Shine.
“Although the transaction makes little or no business sense for News Corp. and is far above a price any independent, disinterested third party would pay for Shine, it is unsurprising that the transaction was approved by News Corp.'s board,” lawyers for the bank said in the complaint.
Mr. Murdoch's daughter is expected to join the board of News Corp. upon completion of the deal, the company said Feb. 21. Elisabeth Murdoch founded Shine, which produces shows such as “MasterChef,” in 2001.
In its complaint, Amalgamated accused Murdoch of treating the company “like a wholly owned family candy store.” The transaction is the latest attempt to further the “selfish” interests of News Corp.'s controlling shareholder at the expense of the company, according to the complaint.