01
MUMBAI: News Corp chairman Rupert Murdoch and elder son Lachlan are being sued by shareholders in TV guide company Gemstar over the $30 billion fall in its value in the past two years.
News Corp, which owns 42 per cent of Gemstar, and the Murdochs, who sit on the US company‘s board, stand accused of helping defraud investors by "causing Gemstar to engage in unlawful conduct." The lawsuit claims Gemstar failed to issue reports showing the falling value of the business and threats to its major asset, patents for a system to record television programmes, the thisislondon.co.uk website has reported.
At a time when investors are scrutinizing US companies‘ accounting statements for numbers perceived as false or misleading, a judge‘s determination that Gemstar‘s patents haven‘t been infringed once again calls into question Gemstar‘s revenue recognition policies. Earlier this year, the company disclosed that it had recorded more than $100 million in licensing revenue from Scientific-Atlanta since 1999, even though Scientific-Atlanta had refused to pay up and then sued Gemstar in federal court to get a ruling that it wasn‘t infringing on Gemstar‘s patents.
News Corp has had to write off about $4 billion of its investment in Gemstar and is expected to write off another $1billion when it reports results later this month, says thisislondon.co.uk.
