News Corp shares plummet in Australian trade

SYDNEY: Shares in Rupert Murdoch's embattled News Corporation plummeted in Australian trade on Monday as the escalating phone hacking scandal continues to harm the global media giant's image.

The stock ended 4.13 percent, or 61 cents, lower at Aus$14.16 on heavy volumes, having clawed back from a 7.6 percent slump that saw it touch a two-year low of Aus$13.65.

The losses came on the heels of a more than 11 percent fall last week.

"It's completely sentiment-driven and people are wondering if it will be forced to sell assets in the wake of the phone hacking scandal," said RBS head of domestic sales and execution Justin Gallagher.

Shaw Stockbroking senior dealer Jamie Spiteri said the shares likely had further to fall.

"It could go lower. It's not their commercial management of the situation but their political management of the situation -- that's very hard to value," he said.

The plunge came as the scandal surrounding Australian-born Murdoch's media empire intensifies with Rebekah Brooks, the former head of Murdoch's British newspaper wing, arrested on Sunday.

She was questioned for 12 hours, then bailed, over claims she conspired to intercept communications and that the now-defunct News of the World tabloid, of which she was editor, paid police for stories.

At the same time, Britain's top police officer resigned due to speculation about his links to Murdoch's company and the force's botched investigation into hacking at the News of the World.

Long-time Murdoch ally Les Hinton also quit at the weekend, stepping down as chief executive of Dow Jones and publisher of the Wall Street Journal, both owned by News Corp.

The 80-year-old media baron Murdoch, now a US citizen, has been called to testify before a public inquiry in Britain, which will examine phone hacking and links between politicians and the press.

His son, James, and Brooks have also been summoned and Prime Minister David Cameron has warned that anyone found guilty of wrongdoing could be barred from future roles in Britain's media.

In Australia, the birthplace of Murdoch's global empire, the heat was turned up with Communications Minister Stephen Conroy lashing out at Sydney's Daily Telegraph newspaper.

Conroy accused the Murdoch-owned daily of being intent on bringing down the government, claiming it adopted an anti-Labor policy after a recent meeting of executives from his Australian arm, News Limited, in Carmel, California.

"It is just running a campaign on regime change," he told ABC radio.

"As John Hartigan (News Limited Australia CEO) admitted in the papers on the weekend, arising from the conference they had in Carmel, they decided to do more issues-based campaigning.

"I think the Daily Telegraph is probably the worst of the examples at the moment where it is running a campaign."

Hartigan last week denied there was any News Limited push to unseat Labor, which is languishing in the opinion polls.

News Limited controls a large chunk of the Australian metropolitan and regional newspaper market, including national broadsheet The Australian, as well as having extensive Internet assets.

The company also has a stake in broadcasters Sky News and Fox Sports, and is angling to run the international Australia Network TV channel.

Australia's Greens party has called for a parliamentary review of the nation's media, with News Limited saying it would co-operate with an inquiry, although it wants the scope of any probe to be clearly defined.

Copyright AFP (Agence France-Presse), 2011