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Investors vent anger at Murdoch
LONDON, England (Reuters) -- UK pay-TV firm BSkyB has become Murdoch & Son with the appointment of James Murdoch as its chief executive, but angry shareholders are unable to do much about it. "We are disappointed,'' said a spokesman for Standard Life Investments. "We were dismayed,'' said Iain Richards of Morley Fund Management. "We have concerns,'' said the National Association of Pension Funds. Analysts say they expect more bark than bite from investors because they have made considerable gains by investing in BSkyB, while Rupert Murdoch's influence on the firm has never been in question. If only as a symbolic protest, shareholders may vote out non-executive director Norman St John Stevas, who led the search committee, and could potentially call an emergency general meeting to unseat the entire board. "But really, shareholders would have to look at what that might achieve,'' said media analyst Omar Sheikh of Charles Stanley. "At the end of the day unfortunately, most shareholders don't want to do anything as controversial.'' Deutsche Bank, Bear Stearns and Charles Stanley downgraded BSkyB or cut their estimates for the firm on Tuesday, while Merrill Lynch raised earnings forecasts. BSkyB shares were down 1.7 percent to 652.5 pence in midday trading after making gains a day earlier. LITTLE SCOPE FOR REVOLTUnlike rival UK television firm Carlton, whose Chairman Michael Green was unseated from his promised role by angry investors, BSkyB's shareholding structure is not amenable to a revolt even though some of its largest shareholders were also involved in the Carlton coup. BSkyB's ownership consists of one behemoth -- the elder Murdoch's media conglomerate News Corp which owns 35.4 percent of shares -- and dozens of smaller holdings, none larger than Legal & General's 2.75 percent. There are only four other investors with more than one percent of shares: Barclays, Janus Capital and Standard Life. Grievances will almost certainly be aired at BSkyB's annual meeting on November 14. Groups including the Association of British Insurers and the National Association of Pension Funds are angry that they were not fully consulted as BSkyB's nomination committee vetted candidates and have questioned whether James Murdoch was a shoo-in from the start. Meanwhile, his defenders say the younger Murdoch son is a gifted media executive whose inexperience in pay television was not a problem when he brought News Corp's Star TV operations in Asia to profitability. "There are some observers of James in the far east on the banking side who got to know him when he first arrived, and it was clear he had an instinct for pay TV,'' said one source close to the media scion. "He's probably had a lot of exposure to it just by osmosis.'' Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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