Last updated: April 19, 2012 - 9:55pm
News Corp. is expected to disclose it is suspending half the voting rights of its foreign shareholders to deal with an inadvertent breach of the U.S. foreign ownership limits of the Communications Act, said people familiar with the situation.
The media company owns 27 television stations, mostly affiliated with the Fox network. The Communications Act of 1934 says that a broadcaster cannot have more than 25% foreign ownership. As part of a survey of News Corp.'s ownership conducted in the lead-up to renewal of certain licenses, News Corp. discovered that voting stock held by foreign investors had risen above the 25% limit, a person familiar with the situation said. Big foreign shareholders in News Corp. include Saudi investor Prince Alwaleed bin Talal, who has about 7% of the voting stock. It is possible that this shareholding, combined with stock held by other investors from Australia or Britain, put News Corp. over the limit. To deal with the breach, News Corp. will suspend 50% of the voting rights of B class voting shares held by non-American shareholders. The suspension will last until the company is in compliance with the ownership limits, said a person familiar with the situation.
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