BSkyB faces grilling on Murdoch son

INDEPENDENT non-executive directors at British Sky Broadcasting face a grilling from big City investors if Rupert Murdoch succeeds in appointing his younger son James as chief executive.

Powerful shareholders want the BSkyB nomination committee, made up of former Cabinet minister Lord St John of Fawsley and Goldman Sachs banker John Thornton, to give a full account of their reasoning if the 30-year-old is named chief executive.

Rupert Murdoch chairs BSkyB and his companies hold a 34% stake.

Robert Talbut, chief investment officer at fund manager Isis, said: 'We will be checking that independent directors followed the proper process and selected a chief executive from the widest possible range of sources.'

As the campaign to promote James Murdoch to the top job gathered pace, it emerged that incumbent chief executive Tony Ball is negotiating his severance pay.

Ball, who cashed in £9m of shares and options in August, is in line for a year's salary of £743,000. He is expected to leave in May when his contract runs out. He is keen to branch out on his own.

Investors fear James Murdoch's appointment will ease the way for his father to funnel BSkyB cash into other projects, instead of rewarding them for their long-term support.

After a massive wave of investment in its satellite technology, BSkyB made profits of £259.6m last year, reversing years of losses.

Shareholders fear if the family influence at Sky becomes more powerful, they will find themselves in the same position as minority shareholders in Murdoch's US media group Fox Entertainment. Murdoch Senior used Fox as a vehicle to buy a 34% stake in Hughes Electronics, owner of US satellite broadcaster DirecTV, for £4.3bn.

The finances of News Corporation, Fox's parent, were less disadvantaged than Fox.