Investors should consider implications of hacking scandal

After the hacking allegations directed at the News of the World, pension investors should consider the implications for the proposed BSkyB buyout by News International, FairPensions said.

As a FTSE 100 company, BSkyB shares can be found in virtually all pension funds in the UK. As holders of BSkyB shares are expected to have a vote on the takeover proposal in the next few months, FairPensions believes UK pension providers should question whether the takeover of BSkyB by NewsCorp is in the best long-term interests of their millions of members.

FairPensions is urging investors in BSkyB to consider both the financial and wider risks associated with the takeover. NewsCorp’s shares recently dropped 3.6%, wiping £1.7 billion off the group’s stock market value.

Louise Rouse, director of engagement at FairPensions, said: “The latest allegations clearly demonstrate to pension investors that corporate reputational risk presents meaningful financial risk for their beneficiaries.

“Pension investors should seriously consider whether the takeover of BSkyB by NewsCorp is in the long-term interests of their beneficiaries. We believe these interests extend beyond the price paid for BSkyB shares to include broader social issues like media plurality in this country.

“Two men have already been jailed because of hacking at New of the World and the saga has been rumbling on for years. Is this another example of the investment community avoiding engagement on corporate governance issues and waiting for a crisis to unfold before they will act?”

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