News Corp.’s James Murdoch to Be Recalled by U.K. Parliamentary Committee

News Corp. (NWSA) Deputy Chief Operating Officer James Murdoch was asked to testify for a second time on phone hacking to the U.K. Parliament’s Culture Committee after former employees challenged statements he made to the panel.

Murdoch, 38, will be recalled after the committee has heard from Les Hinton, the former chairman of the U.K. newspaper unit News International, panel chairman John Whittingdale told reporters in London today. News Corp. was also sued by a victim of the 2005 London terror attacks and was accused by investors in the U.S. of ignoring misconduct at subsidiaries.

Last week, Tom Crone, the lawyer for the now defunct News of the World newspaper until July, and Colin Myler, a former editor, said they told Murdoch in 2008 about an e-mail that suggested hacking at the tabloid went beyond a rogue reporter. Murdoch disputes this and told the committee in July that he hadn’t realized until late 2010 that hacking was widespread.

“We will have some more questions based on what we’ve heard that we will want to put to James Murdoch,” Whittingdale told Sky News. Murdoch will be “happy” to attend, News Corp. said in an e-mailed statement.

The phone-hacking scandal not only led to the closure of the News of the World, it also forced News Corp. to drop a takeover bid for British Sky Broadcasting Group Plc. (BSY) At least 16 people have been arrested, among them Andy Coulson, Prime Minister David Cameron’s former communications chief and an ex- News of the World editor.

Terrorist Attacks

As well as Murdoch and Hinton, the panel will also hear testimony from Mark Lewis, a lawyer for phone-hacking victims, and Farrer & Co., which has represented the company in some hacking cases.

News International was today sued by the mother of a victim of the July 7, 2005, terrorist attacks claiming that reporters hacked into voice mail to get stories regarding her son.

The complaint was added today to a group of test cases that will determine the level of appropriate damages in phone hacking lawsuits. The latest case, filed by Sheila Henry, is the first lodged by a victim of a crime, Hugh Tomlinson, a lawyer for some phone-hacking plaintiffs, said at a hearing.

The News of the Word has been sued by dozens of celebrities and politicians, including actor Jude Law and former Deputy Prime Minister John Prescott, who claim the paper accessed their voice mails for stories. The tabloid was also accused of hacking into the voice mail of murdered schoolgirl Milly Dowler’s phone.

Tomlinson said News Corp. had located “tens of thousands of documents” during the discovery process and an e-mail database had been reconstructed.

‘Humble Day’

In the U.S., shareholders that sued the company’s directors earlier this year over alleged nepotism, accused them in an amended complaint of ignoring conduct by subsidiaries that led hundreds of millions in damages.

James Murdoch and his father Rupert, 80, News Corp.’s chief executive officer, were questioned by lawmakers for three hours on July 19. Rupert Murdoch called it “the most humble day of my life.” Both men said they weren’t responsible for hacking and trusted subordinates to run News International, their U.K. publishing unit.

Myler and Crone met with James Murdoch for less than 15 minutes in 2008 to discuss the settlement of a privacy complaint filed by Gordon Taylor, chief executive of the Professional Footballers’ Association. They told Murdoch the company had to settle because Taylor’s lawyers had produced a transcript of voicemails typed by a reporter at the newspaper and marked “for Neville,” they said at a committee hearing last week.

“I think everybody perfectly understood the seriousness and significance of what we were discussing,” Myler told the panel.

‘I Probably Did’

Asked if he had told Murdoch that this appeared to be a reference to Neville Thurlbeck, the paper’s chief reporter, Crone replied, “I’ve got a feeling I probably did.”

James Murdoch said neither Myler nor Crone told him that wrongdoing extended beyond reporter Clive Goodman and private investigator Glenn Mulcaire, who both went to jail in 2007.

“As I said in my testimony, there was nothing discussed in the meeting that led me to believe that a further investigation was necessary,” Murdoch said in a statement. “They did not show me the e-mail, nor did they refer to Neville Thurlbeck.”

Murdoch has said he agreed to the payment -- more than 10 times the record court award in a privacy case at the time -- on advice of outside counsel.

More Questions

Hinton, who quit as chief executive officer of News Corp.’s Dow Jones & Co. unit in July as the phone-hacking scandal spread, now lives in the U.S. When he last gave evidence to the committee, in September 2009, he did so by video link, an option that the committee will offer him this time.

Hinton will face questions about his decision to authorize a payment of a year’s salary to Clive Goodman, the News of the World’s royal reporter, when he fired him in 2007 after he was jailed for phone-hacking. Goodman later received a further 150,000-pound ($240,000) payment to settle an unfair dismissal claim.

Hinton wrote to the panel Aug. 31 that he had nothing further to add to previous testimony on the subject.

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To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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