News Corp. said it has suspended the voting rights for 50% of its Class B super-voting stock temporarily, after it learned it had inadvertently fell out of compliance with federal foreign ownership rules.
In a statement Wednesday, News Corp. said that its board of directors had determined that the number of Class B shares held by non-U.S. stockholders was about 36%, exceeding regulations that cap foreign ownership of broadcast television license holders at 25%. News Corp. parent of Big 4 broadcasting network Fox Broadcasting, owns and operates about 27 television stations across the country.
According to News Corp., the suspension of voting rights will continue "for as long as the company deems it is necessary to secure compliance with applicable law."
In addition, the Murdoch family, including News Corp. chairman and CEO Rupert Murdoch, has agreed not to vote or to provide voting instructions with respect to a portion of their Class B shares, so as to not effectively increase its voting stake during the suspension period. The Murdoch family owns about 39.7% of News Corp.'s voting shares.
Although a native of Australia, Rupert Murdoch became a U.S. Citizen in 1985, which allowed News Corp. to purchase the stations in the first place.
News Corp. said it would provide updates on non-U.S. ownership of its shares in advance of future shareholder meetings, adding that it will revise the voting rights suspension "based on its ongoing monitoring of the level of foreign ownership."
News Corp. shares were down 1% (20 cents) to $19.58 in early trading Wednesday.
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