Rupert Murdoch survives massive investor backlash at 21st Century Fox
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Rupert Murdoch survives massive investor backlash at 21st Century Fox

Rupert Murdoch has survived the latest battle to end his control of 21st Century Fox despite a massive revolt by investors at the media group's annual meeting early on Thursday morning.

Nearly 78 per cent of the voting stock controlled by Murdoch's fellow investors was voted in favour of unwinding the dual-class share structure that allows the billionaire to control 40 per cent of the voting stock despite owning just 12 per cent of the company.

The vote was always going to be uncomfortably close for the Murdochs.

The vote was always going to be uncomfortably close for the Murdochs.

Photo: Bloomberg

The final vote was 313.7 million shares voted in favour of the resolution and 412.5 million against - including the 317 million voting shares held by the Murdoch family.

The vote was always going to be uncomfortably close for the Murdochs, coming just weeks after it became clear Murdoch no longer had Saudi billionaire Prince Alwaleed Bin Talal in his corner.

The recent arrest of the prince - a long-time ally of the Murdoch family - led to scrutiny of his voting stake in Fox, which made Murdoch's control impregnable.

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It became clear that the prince had sold his stake, possibly years ago, but the opaque corporate rules governing Fox means that the company has not had to report this significant change.

Investors like Nathan Cummings Foundation have argued that a more conventional share structure is needed to hold the Murdoch-controlled group accountable to investors.

"We have long argued that scandals like these [phone hacking and sexual harassment] are in large part a result of a capital structure that fosters a lack of accountability," said the foundation prior to the meeting.

But Rupert Murdoch and his sons, Lachlan and James, know the larger battle is still ahead of them - convincing the market that recently revealed talks to sell a large part of Fox - and its Sky stake - to Disney, is not a signal that it does not have the scale to compete against a new generation of rivals like Google, Facebook and Netflix.

"Universal connectivity and access to nearly every piece of content ever made represents remarkable opportunity," Rupert told investors. "And it's still very early in this evolution."

He said "content is king all over again" and Fox was "uniquely positioned".

There was also a significant protest vote at the meeting against the re-election of independent directors including high-profile Australian businessmen like Rod Eddington and former Ford boss and BHP Jac Nasser.

The largest protest vote was reserved for the sole female director of the company, which has been plagued by sex scandals. More than 27 per cent of voting shares rejected the re-election of Delphine Arnault to the board. She did not show up to the meeting.

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

Colin Kruger

Colin Kruger is a business reporter. He joined the Sydney Morning Herald in 1999 as its technology editor. Other roles have included the Herald's deputy business editor and online business editor.

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