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James Murdoch resigns as BSkyB chairman

From Nina Dos Santos, CNN
April 3, 2012 -- Updated 1930 GMT (0330 HKT)
STORY HIGHLIGHTS
  • NEW: James Murdoch says he is quitting to shield BSkyB from a newspaper scandal
  • NEW: News Corp. and BSkyB shares both fall on the news
  • Murdoch has been hammered by scandal at the now-shuttered News of the World
  • Police, lawmakers and an independent inquiry are all investigating the scandal

London (CNN) -- James Murdoch, the son of media magnate Rupert Murdoch, stepped down as the chairman of BSkyB on Tuesday, the British satellite broadcaster announced.

He has been hammered by accusations that News Corp.'s British Sunday tabloid the News of the World systematically eavesdropped illegally on crime victims, politicians, celebrities and veterans in search of stories.

Murdoch, 39, has consistently denied knowing about the scale of phone hacking at the paper, which he ordered shut down last summer in the face of the scandal.

He referred to it in his resignation, saying: "I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company."

He made clear he was trying to shield the satellite broadcaster from fallout from the newspaper scandal, saying: "I believe that my resignation will help to ensure that there is no false conflation with events at a separate organization."

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Murdoch will stay on as a non-executive director of BSkyB.

BSkyB shares in London fell about half a percentage point on the news of his resignation, and the Murdoch family's News Corp. fell about the same at the open in New York.

The resignation comes on the heels of his stepping down from News Corp.'s British newspaper publishing companies in the wake of scandals over the past year.

When he quit as chairman of News International in February, the company said it was to focus on News Corp.'s pay television services.

London's Metropolitan Police are conducting three separate investigations into the scandal, which also includes allegations of e-mail hacking and police bribery. Dozens of people have been arrested but no one has been charged.

Two parliamentary committees and an independent inquiry led by a judge are also probing the scandal.

The scandal broke as News Corp. moved to expand its ownership of BSkyB last summer -- a plan it shelved as politicians and the public expressed outrage about the hacking of the voice mail of a missing teenage girl who later turned out to have been murdered.

James Murdoch has been seen as a potential heir to his father's media empire.

He has twice been called to testify before lawmakers in London about what he knew of misconduct by staff at News International.

In a letter to parliament's Culture, Media and Sport committee last month, James Murdoch said he could have asked more questions of senior officers at the firm, but rejected the suggestion that his resignation as chief executive reflected unrevealed knowledge relating to the scandal.

"I take my share of responsibility for not uncovering wrongdoing earlier," he wrote in the letter, dated March 12 and published by lawmakers.

A News Corp. board meeting is scheduled for later Tuesday.

CNN's Kendra Wates contributed to this report

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