Sotheby’s savaged over Murdoch
Blue-blooded auction house Sotheby’s has come under attack from US shareholders for failing to oust James Murdoch over the phone-hacking scandal.
Murdoch junior announced he was stepping down from the Board last month amid the furore, which culminated in him quitting his chairmanship at BSKYB.
But in a blistering letter to Sotheby’s, shareholders representing over $200bn of US pension funds said the media scion should have been pushed out before he jumped. It claimed its directors were ‘passive bystanders in a slow motion train wreck, leaving it up to James Murdoch to voluntarily step down’.
The letter, from the Change to Win Investment Group – which lobbies on behalf of US trade unions – criticised the auction house’s decision to back Murdoch, ‘unnecessarily exposing Sotheby’s to months of negative media attention’.
It said this had an ‘unwelcome sense of déjà vu for shareholders’, pointing out that disgraced peer and former newspaper magnate Conrad Black was allowed to step down almost a decade ago ‘despite the spectre of civil fraud charges hanging over him for months’.
Sotheby’s, founded in London in 1744 by London bookseller Samuel Baker, was also slammed for the ‘flawed nomination’ process of its board that ‘fails to identify and recruit credible, outside directors’.
The letter said four of the last six appointments were hand-picked by the chief executive and urged shareholders to vote against the re-election of Michael Sovern, Allen Questrom and Diana Taylor – the directors in charge of nominating board members – at the annual meeting on May 8. This, it argued, would send a ‘strong message that rather than rubber stamping management’s candidates’, the company needs to ‘undertake a thorough search for a new crop of independent directors’. Us-owned Sotheby’s, the oldest company on the New York stock exchange, refused to comment. But the attention will be unwelcome for the venerable firm, which is more accustomed to hitting the headlines for selling famous works of art.
It expects to fetch over £50m for Edward Munch’s 1895 masterpiece The Scream on May 2 in New York.
The broadside from US shareholders also provides yet more unwelcome attention for Murdoch who has stepped down from a string of directorships, including
News International, which used to publish the defunct News of the World, and pharmaceutical giant Glaxosmithkline.
An imminent report from the influential Treasury Select Committee of MPS is expected to heavily criticise Murdoch, but fall short of saying he misled parliament when he said he did not know about the full extent of phone hacking at the News of the World until late 2010.