SYDNEY, (AFP) - News Corp. Ltd's controversial plan to relocate to the United States received a boost after a group representing 32 Australian superannuation funds said it will urge members to support the move.
The Australian Council of Superannuation Investors, which holds about three percent of News Corp. shares on behalf of its members, said it was happy with the amendments to the company's corporate governance arrangements.
"Although it's not everything that we wanted, on balance it is an improvement. It is a better package for shareholders," said ACSI executive officer Phil Spathis.
"We'll be making a recommendation in favour following the corporate governance improvements."
ACSI members hold 2.1 billion Australian dollars (1.5 billion US dollars) worth of News Corp.'s stock.
Spathis said the ACSI worked through the outstanding corporate governance concerns with News Corp.'s legal council on Wednesday night.
Institutional shareholders had feared News Corp.'s plan to relocate to the US state of Delaware from Australia would erode shareholders rights, as corporate governance requirements in Delaware are less stringent than those applying in Australia.
Many large funds have threatened to block the proposal when it is put to the vote at News Corp.'s October 26 annual general meeting in Adelaide.
Corporate Governance International, which provides proxy advice to fund managers, said it had reserved judgement on News Corp.'s reincorporation plan.
"We'll be doing our report over the weekend, it will go to our clients, it won't be made public," CGI director Sandy Easterbrook said.
The biggest proxy adviser to US fund managers, Institutional Shareholder Services, is due to make a statement.
Other fund managers - including British pension fund Hermes and the largest pension fund in the world, CalPERS -- will determine their position over the weekend before making a recommendation to their clients.
ACSI's Spathis said general feedback from fund managers worldwide appeared to support News Corp.'s corporate governance ammendments.
"We have been liaising with pension funds around the world and with other proxy advisors," Spathis said.
"Any feedback that I've received thus far from those funds has been positive."
"Our recommendation is only that, it is a recommendation. But I would expect this proposal to go through."