July 11, 2011, 2:26 PM — An investor lawsuit filed in Delaware accuses News Corp. chief executive Rupert Murdoch of hurting the media conglomerate's value by using its resources to "enrich himself and his family members at the Company's and its public shareholders' expense."
You can read the entire lawsuit here.
What triggered the latest legal action, of course, was the phone-tapping scandal that eventually led to the closure of the 168-year-old trashy British tabloid News of the World.
That's just the most current outrage to investors, who say Murdoch long "has treated News Corp. like a family candy jar."
The latest example is News Corp.'s acquisition of television and film production company Shine Group Ltd., owned by Murdoch's daughter, Elisabeth. News Corp. paid $615 million to buy Shine -- about $250 million more than the investors say the company is worth.
It was the Shine acquisition that prompted the initial lawsuit, which was amended to include the News of the World fiasco.
But check this out: Not only did Murdoch waste $580 million in 2005 by buying Myspace, which his company promptly drove into oblivion, he paid his wife, Wendi Deng, nearly $300,000 to provide "strategic advice" to Myspace China over a three-year period. (This comes from News Corp.'s 2010 annual report.)
It appears that Deng's main credential for the job is that she's from China. Unless Rupert figured her stint as a junior executive at Hong Kong's Star TV -- before she married Murdoch way back in 1999, when no one had ever heard of Facebook, Twitter or LinkedIn, never mind Myspace -- qualified her to advise a social networking site.
And look at how Rupert's gut instinct paid off!
* Two-thirds of the staff were laid off in January, and the MySpace China CEO resigned.
This came just a couple of years after Deng was supposed to come in and save MySpace China following the September 2008 resignation of the previous chief executive.
And yet those malcontent investors fail to perceive Deng's strategic brilliance. She was worth twice what News Corp. paid her, even as MySpace was worth about 6 percent of what Murdoch paid for it in 2005 when it finally was unloaded earlier this month for $35 million.