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News Corp. Set to Change Corporate Constitution

Oct 6, 2004  •  Post A Comment

News Corp. is close to changing its constitution to bolster its corporate governance rules in an effort to quell worry among Australian shareholders still on the fence about whether to support the company’s domicile change to the United States. Details of the changes are expected to come Thursday.

If the rules are strengthened, it could help assuage investors in Australia, who fear U.S. governance rules are less stringent and less protective of shareholders than Australian rules.

But it might not silence all of the naysayers. Some shareholders are angry that News Corp. will be required to withdraw from a major Australian stock index to increase its chances of being included in the benchmark Standard & Poor’s 500 index in the United States.

The decision to change the constitution came after an influential shareholder group in Australia said it would vote against the domicile shift after News Corp. said it did not plan to maintain Australian corporate-governance rules once it moved to the United States.

Shareholders are expected to vote Oct. 26 on the domicile shift, and News Corp. Chairman and CEO Rupert Murdoch has said he is confident shareholders will approve the switch.