Lachlan Murdoch breaches ownership rules with Prime and DMG directorships

Lachlan Murdoch is in the bad books with ACMA for a technical breach of the ownership rules. The regulator found that the commercial radio directorship limits of the Broadcasting Services Act were breached by Murdoch and Siobhan McKenna (a board appointee of Murdoch’s company), because they were in a position to control two radio networks (Prime and DMG) in two Queensland overlapping licence areas. The pair have has since resigned from the Prime board to fix the problem.

 

Section 56 of the Act says a person cannot be a director (or “controller”) of companies that are in a position to exercise control of more than two commercial radio licences in any licence area.

 

Murdoch and McKenna came into breach of section 56 on 7 October 2010 when he was appointed as a director of Prime Media Group Limited (Prime), which is in a position to exercise control of Hot91/4MCY in the Nambour radio licence area. At that time, Murdoch was also a director and a controller of a number of companies which were in a position to exercise control of Nova 106.9/4BNE and 97.3/4BFM in the Brisbane radio licence area.

Under the Act, the overlapping Brisbane and Nambour commercial radio broadcasting licence areas are treated as a single licence area, because more than 30% of the Nambour RA1 licence area population overlaps with the Brisbane RA1 licence area.

 

Murdoch, who invested in the companies through his company Illyria Radio Investments Limited, and McKenna, who is a board member, resigned as a director of Prime on 9 November 2010 because of the technical breach.

ACMA has decided to take no further action, noting the overlap complexities and because of the resignations and co-operation  in the matter.

Following ACMA’s findings, companies in the Illyria group have advised that they have implemented revised procedures to ensure that appropriate consideration is given to the radio directorship limits before new directors are appointed to their boards.

 

ACMA says it is “a timely reminder to all directors and their boards to consider the directorship limits specified in the Act prior to the appointment of new board members.”