GLOBAL - A coalition of Australian and international funds has warned it will not guarantee support for Rupert Murdoch's plan to move his News Corporation headquarters from Australia to the US.
The warning came from the Australian Council of Superannuation Investors (ACSI), which represents 32 Australian funds, after News Corp turned down an investor group proposal that the company apply existing corporate governance standards when it reincorporates in the US. The funds fear the plan will severely reduce shareholder involvement in News Corp decision-making.
ACSI president Michael O’Sullivan said the standards, which have applied to News Corp as an Australian company, have operated effectively in recent years and contributed to “higher levels of investor confidence”.
“Corporate governance considerations assist superannuation funds to mitigate overall investment risk in these listed companies,” he said.
“The coalition of Australian and international superannuation funds and their support for the maintenance of existing governance standards clearly signals that there are no guarantees of support for the move to Delaware from these investors.”
International pension funds supporting the effort belong to the Global Institutional Governance Network, which manages Aus$1trn (e582bn) in funds across the world, and includes fund giants ABP Netherlands, US-based CalPERS and Japan-based NAMCO.
News Corp is seeking shareholder approval for the shift, arguing more than 75% of revenues are now generated in the US. ACSI and Corporate Governance International, with support of a number of international funds, have been in discussions with the company over the last three months on the implications for investors.
Some concerns raised included that takeover protection for minority shareholders were negligible in the US and the board would be able to create another class of shareholding without shareholder approval.
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