News Corporation has settled the class-action lawsuit filed against the company on behalf of its shareholders, agreeing to a $139 million payout.
The suit, filed against the directors of News Corporation, consolidated multiple complaints about the 2011 acquisition of television production company Shine Limited and the phone-hacking scandal surrounding News Corp.'s tabloid "News of the World," which led to the paper's folding. The suits were consolidated because they involved the same basic complaint, that the oversight of the company was inadequate.
Shareholders had complained that News Corporation paid too much for Shine, which had been owned by Elisabeth Murdoch, daughter of New Corp. boss Rupert Murdoch.
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"We are pleased to have resolved this matter," News Corp. said in a statement. "The agreement reflects the important steps News Corporation has taken over the last year to strengthen our corporate governance and compliance structure and we have committed to building on those efforts going forward."
As part of the settlement, which was the result of mediation and still awaits court approval, News Corporation offers no admission of wrongdoing. The company has also agreed to a number of "enhancements" to its compliance and governance structures, most of which have already been put in place.
The numerous enhancements, which will remain in place until at least the end of 2016, include the introduction of a Compliance Steering Committee which will include both full-time compliance officers and senior News Corp. executives; and the establishment of an anonymous whistleblowing hotline. News Corp. will also adopt a Board policy on political activities as part of the enhancements.
News Corp. won't actually be paying out much as a result of the settlement; company will recover the $139 million in insurance proceeds, with a small amount going to the plaintiffs' attorneys.
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