The Church of England is to retain its £9 million investment in Rupert Murdoch’s media empire in the hope that the share price will rise again if all his British newspapers are sold or closed.
The Church Commissioners, who manage the Church of England’s £5.3 billion investments portfolio, owns shares in both News Corp and BSkyB, state Daily Telegraph reports.
The Church Commissioners, which manage investments on behalf of the Church of England, own almost 350,000 shares in News Corp, worth £3.8 million.
The Church’s ethical investment committee has now written to Mr Murdoch calling on him to hold senior executives to account over the “gross failures of management” over phone hacking at the News of the World.
They have come under pressure from senior Anglicans to pull out of Murdoch-owned companies in the wake of the phone-hacking scandal on the grounds that continuing to invest is unethical and “embarrassing”.
The Church’s ethical investment advisory group said it would first seek to persuade Mr Murdoch to discipline senior executives before considering the “nuclear option” of withdrawing its investment in the company.
The statement was seen as a thinly veiled demand for Rebekah Brooks, chief executive of News International and a former editor of the Sunday tabloid, to be fired.
Professor Richard Burridge, deputy chairman of the ethical investment committee, said: “If we don’t get a satisfactory answer then disinvestment comes on to the horizon, but you can’t go straight to the nuclear option, you have to engage first.”
In the letter to Mr Murdoch, the Church described the behaviour of the News of the World as “utterly reprehensible and unethical”.
The closure of the newspaper, while welcome, was not a “sufficient response” to revelations of malpractice at the newspaper, the group said in a statement.
“We cannot imagine circumstances in which we would be satisfied with any outcome that does not hold senior executives to account at News Corporation for the gross failures of management at the News of the World,” the statement said.
Andreas Whittam Smith, the first church estates commissioner, acknowledged that the issue posed a “ticklish” dilemma for the investment fund.
But he suggested that selling the Church’s £3.8 million of shares in News Corp and £5.3 million invested in BSkyB, which is part-owned by Mr Murdoch, could waste an opportunity to make money.
He told the Church’s national assembly, the General Synod, in York:
“A premature sale of News Corp and BSkyB might just be simply very bad timing.
“I don’t argue with anything that anybody is saying about them but I think it must be possible that News Corp will get rid of its entire British holdings of newspapers.
“If it is to do so, first of all the problem would have vanished from the point of view of the parent company, and for us as investors, and the shares will certainly bounce up again. So it is a ticklish area.”
Mr Whittam Smith’s remarks follow protests from clergy over the Church’s continued investment in Mr Murdoch’s media businesses.
The Church’s ethical investment advisory group wrote to Mr Murdoch last week demanding that his senior executives – such as Rebekah Brooks, the chief executive of News International – should be held to account for “gross failures in management” at the News of the World.
The Sunday tabloid was closed last week after disclosures that it had been involved in hacking the mobile phone voicemail of the murdered schoolgirl, Milly Dowler.
Mr Whittam Smith, a former Daily Telegraph City editor and founding editor of The Independent newspaper, said he wished the Church’s ethical investment officers the “best of luck” in their discussions with News Corp about the scandal.
“I do wish them the best of luck in talking to Rupert Murdoch, James Murdoch and Rebekah whatsit,” he said. “It won’t be easy, and I do not volunteer to be part of the team.”
CNI Footnote: Lord Carey of Bristol. The former Archbishop of Canterbury, was a paid contributor to The News of The World.