Murdoch grilled at shareholders' meeting

LOS ANGELES -- British lawmaker Tom Watson grilled News Corp. chief Rupert Murdoch about covert surveillance techniques by company employees as News Corp. held its first shareholders meeting following a phone-hacking scandal.

At the meeting held at News Corp.'s Fox Studios in Los Angeles, Watson asked Murdoch whether he was aware a person who had left prison was hired by News Corp. and hacked the computer of a former army intelligence officer. Murdoch said he wasn't aware, and board director Viet Dinh said the company would look into the allegation.

"I promise you absolutely that we will stop at nothing to get to the bottom of this and put it right," Murdoch told Watson.

Watson evoked private investigator Glenn Mulcaire, who was jailed in 2007 for eavesdropping on the phones of the English royal staff, in warning of troubles ahead: "News Corp. is potentially facing a Mulcaire II. You haven't told any of your investors about what is to come."

Murdoch faced shareholders with small stakes in his company for the first time since the scandal broke in July. Watson, a Labor Party member of Parliament who was representing shares owned by the AFL-CIO labor group, used the event to reveal new details of what he claims are covert surveillance techniques by News Corp. employees. He has spearheaded a 2 ½-year probe into the phone hacking and alleged police bribery scandal at the company's British newspaper unit.

Outside Fox Studios more than 100 demonstrators carried anti-Murdoch signs, including one stating, "Fire the Murdoch Mafia." Another read, "Rich media equals poor democracy."

Murdoch controls News Corp. through his family trust's 40 percent stake of voting shares. A key backer is Saudi Prince Alwaleed bin Talal, who controls 7 percent.

On Friday, nonvoting A shares, which account for most of the company's stock, closed up 35 cents at $17.20.