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UK regulator finds BSkyB fit and proper
UK regulator finds BSkyB fit and proper

British Sky Broadcasting is a "fit and proper" company to hold an operating licence, British regulators say in response to the phone-hacking scandal that engulfed the parent company.

But it criticised the former chief executive and chairman, James Murdoch, for poor management.

The company's licence was called into question because of the scandal at a newspaper owned by News Corp, which effectively controls BSkyB through a 39 per cent shareholding.

If the company had not be found "fit and proper" it could have been stripped of the licence that yielded a net profit of $US1.4 billion ($A1.34 billion) in the year ending June 30.

The Office of Communications, known as Ofcom, concluded that James Murdoch was not complicit in a cover up at the tabloid News of the World, but his failure to initiate appropriate action on a number of occasions was "difficult to comprehend and ill-judged".

The report on Thursday found no evidence that Rupert Murdoch "acted in a way that was inappropriate in relation to phone hacking, concealment or corruption by employees" of his British newspapers.

Though Ofcom said it might review the situation if there are further revelations, the decision removed any immediate threat of BSkyB losing its licence. The company's shares were up 0.5 per cent in early trading in London.

"After a lengthy review process, we are pleased that Ofcom has now reached its conclusion and we look forward to continuing to develop our business for the benefit of customers and shareholders alike," BSkyB said in a statement.

James Murdoch became executive chairman of News Group Newspapers, publisher of The Sun and the now-defunct News of the World, and its parent company News International, which also owns The Times newspapers, in January 2008 and held the position until February this year. Both companies are ultimately owned by News Corp.

The phone-hacking scandal, along with other allegations, has spawned investigations by a parliamentary committee, a formal inquiry led by a judge, criminal charges against some journalists - including Rebekah Brooks, former chief executive of News International - and civil suits which forced the company to pay large settlements.

Ofcom noted contradictory evidence by James Murdoch and two former senior employees about when Murdoch became aware that phone hacking at the News of the World went far beyond the company's long-standing claim that it involved a single rogue reporter and a private detective.

However, it said there was no evidence that he knew of "widespread wrongdoing or criminality" at News of the World.

The regulator limited itself to criticising James Murdoch's actions as company director.

"We consider James Murdoch's conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged."

Since February, James Murdoch has been a non-executive director of the company, and one of only four people on the 12-member board with connections to News Corp.