Murdoch son gets BSkyB top job

MEDIA mogul Rupert Murdoch tightened his stranglehold on satellite TV group BSkyB by parachuting in his son James as chief executive from today. And he showed startling indifference to investor concerns by refusing to stand down as chairman.

The controversial appointment of James was 'unaminously endorsed' by BSkyB's independent directors after a two-and-a-half hour meeting on Monday. The group said directors affiliated to Murdoch's News Corporation did not vote.

BSkyB attempted to placate its critics by naming Lord Jacob Rothschild as independent deputy chairman. But critics will point out that he has long been close to Rupert Murdoch.

There is outrage in the City that the top two jobs at the £12.5bn firm should be held by father and son. Shareholders fear Murdoch will use BSkyB as a 'cash cow' to fund the growth of his News Corp empire.

BSkyB promised to appoint another outside director alongside Lord Rothschild and to make Royal Mail boss Allan Leighton, a BSkyB non-executive, head of its audit committee.

But both moves simply fill a gap left when Allied Domecq chief Philip Bowman leaves the board on 14 November. Lord St John of Fawsley, criticised for his handling of the selection process, remains on board.

Leighton and fellow director Gail Rebuck will defend the board's choice to big shareholders this week. Christine Farnish, boss of the National Association of Pension Funds, said last night: 'We are a bit more comfortable than we were.'

The TUC accused Sky of thumbing its nose at governance. The Association of British Insurers warned that Sky would need to give 'a really compelling explanation'. Morley Fund Management said it was 'dismayed'.

This is not the first time Murdoch, 72, has installed a family member at BSkyB. His daughter Elisabeth spent four years there and was promoted to programming chief. She resigned in 2000. Elder son Lachlan is deputy chief operating officer of News Corp, which owns 35.4% of BSkyB.

Aged 30, James trumps Next boss Simon Wolfson, 36, to become the youngest chief executive of a FTSE 100 company.

James has been running News Corp's Asian subscription-TV firm, Star TV. He is highly rated, but has no experience of running a UK public company.

The City's heat will be turned on directors who approved the move. These include Leighton and former Goldman Sachs president John Thornton. Lord St John may be the first casualty. Up for re- election on 14 November, he is being opposed by the National Association of Pension Funds. Thornton may also go.

Murdoch fans have long argued that James was the best candidate for the job. They hoped to shoehorn directors into ratifying the move without a formal recruitment process. But after howls of protest from investors, the directors brought in headhunters Spencer Stuart.

Critics say the whole process, which took just six weeks, has been a farce.