News Corp sets up global ethics team in wake of hacking scandal

Wed Aug 15, 2012 6:40pm BST

A passer-by stands in front of the News Corporation building in New York June 28, 2012. REUTERS/Keith Bedford

A passer-by stands in front of the News Corporation building in New York June 28, 2012.

Credit: Reuters/Keith Bedford

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(Reuters) - Rupert Murdoch's News Corp has set up a global compliance and ethics team led by its top in-house lawyer, as it deals with the lingering fallout of a phone-hacking scandal that rocked the company just over a year ago.

In a memo to staff, Murdoch said Gerson Zweifach, News Corp's general counsel, will take on the role of chief compliance officer with responsibility for overseeing its global compliance and ethics program. Lisa Fleischman, associate general counsel, will be deputy chief compliance officer and both will report of the company's board and the audit committee regarding the content and operation of the program.

Murdoch said the company has initiated a review of anti-corruption controls in selected locations around the world.

"The purpose of this review is to test our current internal controls and identify ways in which we can enhance them," said Murdoch in the memo. "Let me emphasize that the review is not based on any suspicion of wrongdoing by any particular business unit or its personnel."

The company's business units will be organized into five compliance groups: LA Cable and Broadcast Group, LA Film and TV Production Group, the Europe and Asia Group, the Australia Group and the New York News and Information Group.

Zweifach is not a long-time Murdoch employee. He joined News Corp in January after 29 years at White & Connolly as a litigator focused on securities and antitrust cases.

The moves come 13 months after Murdoch's UK tabloid papers, The Sun and the now defunct News of the World, were found to have systematically been involved in hacking into the voice mails of a range of celebrities, politicians and even ordinary citizens including a murdered school girl.

The hacking scandal has rocked Murdoch's News Corp titles in Britain, put the notoriously aggressive British press under the spotlight with a far-reaching investigation into media ethics, the Leveson Inquiry, and embarrassed senior politicians, including British Prime Minister David Cameron, over cosy ties with the Australian-born businessman.

The scandal has led to more than 60 arrests including dozens of current and former journalists, some of whom held senior positions at News International titles.

The $57 billion (36.33 billion pounds) media conglomerate also announced in June it would split into two publicly traded companies.

Last week, the Church of England sold all its shares in News Corp, citing ethical grounds.

The Church, which has three national investing bodies, sold the shares -- worth 1.9 million pounds -- after its Ethical Investment Advisory Group (EIAG) was not satisfied with the level of corporate governance reform at Murdoch's conglomerate following a year of dialogue.

(Reporting by Yinka Adegoke; editing by Bernadette Baum, Gary Hill)

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