James Murdoch will face calls to resign as chairman of BSkyB at the satellite broadcaster's annual meeting amid fears his links to the phone hacking inquiry at News Corporation will damage the company's reputation.
Top investors such as Kames Capital, which owns 1.7 per cent, and Legal & General, which owns 2.9 per cent, are reportedly planning to vote against Murdoch's re-election as pressure on the son of media tycoon Rupert Murdoch continues to mount.
Elsewhere, Lobby group Pensions & Investment Research Consultants has urged shareholders to oppose Murdoch's return on the grounds that he is not independent enough and over concerns he may damage the company's public image by association.
Meanwhile, political campaigners Avaaz will be holding a protest against Murdoch's position outside the annual meeting at the Queen Elizabeth II Conference Centre in London on Tuesday.
In a statement to shareholders, Pirc said: "Mr Murdoch's involvement in the phone hacking inquiry increases the risk that the company's public standing image overall will be damaged."
But Murdoch, who currently serves as deputy chief operating officer at News Corp, BSkyB's controlling shareholder, is expected to survive as he receives the backing of 39 per cent shareholder News Corp and other investors such as Capital Research Global Investors.
Murdoch, who earlier this month faced tough questioning from MPs over reporting practices at the News of the World, has been BSkyB chairman for just under four years and recently resigned as director of News Group Newspapers, publisher of The Sun and The Times.
He told MPs he "disputed vigorously" claims from former editor Colin Myler and ex-legal manager Tom Crone that they informed him of the significance of an email indicating phone-hacking was widespread.
BSkyB and a number of shareholders have stood by Murdoch and the company wrote to investors to explain why they were backing him.
Nick Ferguson, BSkyB's deputy chairman, said in the letter to investors that Murdoch had "done a first class job" in executing the key roles of a chairman, including facilitating a constructive relationship with the senior management team.
Considering the negative effect on the company's reputation as result of issues surrounding the News of the World, Ferguson said: "We have seen no effect on sales, customers or suppliers over the last five months."
The accusations first came to light over the summer when it emerged the phone of murdered teenager Milly Dowler was hacked by a private investigator employed by the News of the World - eventually leading to News Corp shutting the paper down.
http://news.ninemsn.com.au/article.aspx?id=8381386
