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Rediff.com  » Business » Inheritance battle splits Murdoch's family

Inheritance battle splits Murdoch's family

Source: PTI
August 01, 2005 18:40 IST
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A bitter family battle over inheritance has split media titan Rupert Murdoch's family, according to reports.

The feud, which has been brought to the fore by the resignation of presumed heir apparent Lachlan Murdoch (33), has all the hallmarks of a family drama, it said.

It pits the older children (of Murdoch), and Deng, in her mid-30s, against Murdoch's children by his first two marriages.

When Murdoch (74), chairman of News Corporation, which controls major newspapers and TV and radio stations in several countries, married his Chinese-born third wife in 1999, all four of his adult children attended the twilight ceremony aboard a yacht in New York harbour.

But since then, the Wall Street Journal said the marriage has opened a rift between Murdoch and his older children, one that throws into doubt who will control the company after Murdoch.

One of the key debates is who should inherit the family's $6 billion fortune and Murdoch's control of News Corp. Should it be just the media tycoom's adult children, as is now the arrangement, or also his two youngest children by Deng.

The paper said relations between the older children and Murdoch are severely strained, quoting two people familiar with the situation, in part over the children's unhappiness about their father's relationship with Deng.

Lachlan Murdoch will relocate in Australia, which he considers home, with his wife and young baby. He will retain a seat in the News Corp's board.

The family split, the paper said, comes at a sensitive time for the media giant. For the first time in 50 years, Murdoch's control has come under threat.

In a statement on Friday, Rupert Murdoch said he was saddened by his son's decision, adding through a spokesman: "There is no dispute. All my children will be treated equally."

He said he looks forward to the day when Lachlan "wants to return to our company."

Under the terms of Murdoch's divorce with second wife Anna, control of most of the Murdoch family's roughly 30 per cent voting stake in News Corp would be preserved for Anna's three children, Elizabeth, Lachlan and James -- plus Prudence, a daughter from a previous marriage, according to two people familiar with the matter.

The older children believe this meant that Deng and her future offspring were not to share in the block of voting stock held through a family trust, now valued at $5.1 billion, or nonvoting stock, also held in a trust, valued at almost $1 billion.

Murdoch has since attempted to change the arrangement, according to people familiar with the matter, to give some control of the stake to the two children born to his new wife -- Grace (3) and Chloe (2).

Deng, once a junior executive of News Corp's Star TV unit in Hong Kong, has long held an influence in News Corp affairs. She quit her job but maintained a discreet but important role in the company for the first year or so after the wedding, helping identify potential investments and acting as a liaison in China.

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