Rupert Murdoch backs Rebekah Brooks over phone-hacking allegations

Rupert Murdoch has issued an official public statement backing Rebekah Brooks. Photograph: Eddie Keogh/Reuters

Rupert Murdoch has taken the highly unusual step of issuing an official public statement backing Rebekah Brooks over the phone-hacking scandal engulfing his UK newspaper business.

The News Corporation boss described the recent allegations aboutphone hacking and payments to police officers by the News of the World"deplorable and unacceptable".

"I have made clear that our company must fully and proactively co-operate with the police in all investigations and that is exactly what News International has been doing and will continue to do under Rebekah Brooks' leadership," the News Corp chairman and chief executive added, in a statement issued from the annual Allen & Co media business conference he is attending in Sun Valley, Idaho.

Murdoch also said he had asked Joel Klein, who heads News Corp's recently created education unit, "to provide important oversight and guidance". Viet Dinh, a non-executive director, is keeping the News Corp board informed along with Klein, he said.

Murdoch's backing came on a day of mounting pressure on Brooks and News International, with prime minister David Cameron bowing to calls for public inquiries into phone hacking by the News of the World and the Labour leader, Ed Miliband, saying the chief executive should "consider her position".

News Corp also faced criticism from MPs during an emergency debate on phone hacking in the Commons on Wednesday afternoon, with Labour's Tom Watson alleging there was "further evidence" that Brooks "knew about the unlawful tactics of News of the World as early as 2002, despite all her denials yesterday".

Watson also called for Rupert's son James Murdoch, who as deputy chief operating officer oversees the company's European and Asian businesses including News International, to be suspended while the Metropolitan police investigate "what I believe is his personal authorisation of the coverup of this scandal".

Shares in News Corp and BSkyB fell as the News of the World phone-hacking scandal put Murdoch and his bid to take control of the satellite broadcaster under fresh scrutiny.

News Corp shares fell on Wednesday by 5% at one stage on Wall Street, to $17.17, as US investors reacted to the latest developments. BSkyB shares fell as low as 818p at one point in London, a fall of more than 3%, and closed 2.1% lower at 827p.

Sky shares came under pressure after Miliband called during prime minister's questions in the Commons for News Corp's takeover offer to be referred to the Competition Commission, a move that could potentially thwart Murdoch's ambitions. However, Cameron rejected Miliband's call for a Competition Commission review, insisting that the government was following the correct legal processes.

Advertisers including Halifax, Co-op, Vauxhall and Butlins joined Ford in pulling ads from this weekend's News of the World following the latest phone-hacking allegations.

Murdoch's statement came after it emerged on Wednesday that News International will claim Brooks, the News of the World publisher's chief executive, was on holiday when a mobile phone belonging to missing teenager Milly Dowler was hacked into in 2002 when Brooks was editing the Sunday tabloid.

The Guardian understands that the company has established that Brooks, News of the World editor from May 2000 until January 2003, was on holiday in Italy when the paper ran a story that referred to a message that had been left on the teenager's phone. The article, which was about a message left by an employment agency on the murdered schoolgirl's mobile, was published on 14 April 2002.

News International also believes Brooks was away in the two weeks following the murder of Holly Wells and Jessica Chapman in Soham. It is thought that mobile phones belonging to the parents of the two girls were targeted in the days following their death.

That is likely to focus attention on Andy Coulson, who was Brooks's deputy at the time, and would normally have edited the paper in her absence.

Coulson replaced Brooks as editor in early 2003 and has always maintained that he was unaware of any phone-hacking activity by the News of the World. He resigned in January 2007 after the royal reporter, Clive Goodman, and private investigator Glenn Mulcaire were jailed for intercepting the voicemail messages of members of the royal household, saying he accepted responsibility for what had happened but knew nothing about it.

Earlier, in a dramatic prime minister's question time dominated by the hacking scandal, Miliband also accused Cameron of being out of touch with public opinion on the issue of BSkyB and of a "failure of leadership" in the biggest press scandal in modern times.

Cameron told the Commons the inquiries could not be started immediately because of the major police investigation currently under way, though he conceded it "may be possible" to start some of the work earlier.

"We do need to have an inquiry, possibly inquiries, into what has happened," Cameron said. "We are no longer talking here about politicians and celebrities, we are talking about murder victims, potentially terrorist victims, having their phones hacked into.

"It is absolutely disgusting, what has taken place, and I think everyone in this house and indeed this country will be revolted by what they have heard and what they have seen on their television screens."

He said there were two "vital areas" that needed to be considered: why the original police inquiry failed to "get to the bottom of what happened", and the behaviour, practices and ethics of journalists and media organisations.

Cameron said it was important that lessons were learned from "what has become a disgraceful episode".

The Labour leader called on Cameron to appoint a senior figure, possibly a judge, to lead the inquiry, which he said should have the power to call witnesses under oath.

Miliband said the investigation should cover "the culture and practices of the industry, the nature of regulation ... and also the relationship between the police and the media".

Cameron said he did not think it would be possible to investigate the original police inquiry until the new one had concluded.

"Clearly, we can't start all that sort of inquiry immediately because you must not jeopardise the police investigation, but it may be possible to start some of that work earlier," he said.

He offered to hold talks on the matter with other party leaders, the attorney general, Dominic Grieve, and the cabinet secretary, Sir Gus O'Donnell.

But he resisted separate calls by Miliband for the bid by News International to take over BSkyB to be referred to the Competition Commission, saying to do so would be illegal.

Miliband said the public would react "with disbelief" if the deal went ahead in the next few days when News International was the subject of a major criminal investigation.

However, Cameron said the government had followed the correct legal processes, with Jeremy Hunt, the secretary of state for media, culture and sport, handling the matter in a quasi-judicial role. Cameron said: "On the issue of BSkyB, what we have done here is followed absolutely to the letter, the correct legal processes. That is what the government has to do."

The prime minister refused to be drawn on whether Brooks should stand down. Confronted by claims by Miliband that he had made a "catastrophic error of judgment" by taking on Coulson as his director of communications after he resigned from the News of the World, the prime minister said he took "full responsibility" for everyone he employed and appointed to work for him.

While News International issued a statement welcoming MPs' calls for a wide-ranging public inquiry into standards in the media industry to address public concerns, the broadcasting regulator Ofcom said it was monitoring the situation "and in particular the investigations by the relevant authorities into the alleged unlawful activities".

Ofcom said: "In the light of the current public debate about phone hacking and other allegations, Ofcom confirms that it has a duty to be satisfied on an ongoing basis that the holder of a broadcasting licence is 'fit and proper'."

The Metropolitan police commissioner, Paul Stephenson, also revealed that members of his force faced investigation after it was reported on Tuesday night that News International had handed over details of payments made by the News of the World to police officers. He said the documents appeared to "include information relating to alleged inappropriate payments to a small number of [Met] officers".

Stephenson said the matter would be investigated by the deputy commissioner Sue Akers in conjunction with the Met's Directorate of Professional Standards. He added that no senior officer had been implicated. Given that the reports relate to police payments allegedly made between 2003 and 2007, when Coulson was editor, many commentators have suggested they are an attempt to relieve the pressure on Brooks.

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Polo is a winner for Prince William as Catherine looks on

The Duke of Cambridge scores four goals as his team wins the charity match near Santa Barbara. The duchess presents her husband with the trophy.

The Duke and Duchess of Cambridge took in a sweep of Southern California on their state visit Saturday, helicoptering up the coast to Carpinteria for a charity polo match and capping off their evening surrounded by Hollywood celebrities on the red carpet in downtown Los Angeles.

The newlyweds took a break from their packed schedule to bring Californians a bit of British sport, participating in the polo match at the Santa Barbara Polo & Racquet Club.

William — naturally — played on the winning team, and the thrilled onlookers cheered wildly whenever he made a goal. He scored four times, and during an awards ceremony at which Catherine presented her husband with a 15-pound silver trophy, he thrilled the crowd by kissing her on both cheeks.

Being able to dine with the couple at a sit-down lunch with cocktails was expensive. VIP tickets cost $4,000. The afternoon affair was held in a tent on a classic Southern California day — sunny with a dash of ocean breeze.

Long before the royal couple arrived, the club, located down the coast from Santa Barbara in Carpinteria, was already bustling with activity, with workers laying white linens on tables and bringing in vases of white peonies. By 11 a.m., celebrities — including actors Billy Zane, Rosario Dawson andMolly Sims — began to arrive on the red carpet.

Spectators who paid $400 a pop for a boxed lunch across the field from the fancier event sipped Champagne and intently watched the couple, who arrived around noon by helicopter.

William wore a navy blazer and white trousers. Catherine strolled the red carpet in a simple spring dress with a floral print. She was bare-headed, which disappointed many of those

in the crowd who had dressed to the nines to come see her.

Following a style often seen at splashy British events, Diane Lytel, 32, had matched her purple dress with a custom-made fascinator — a whimsical gold headpiece complete with a purple feather. Lytel and her husband, Kipley, who live in a condo overlooking the polo field, had purchased the box-lunch tickets.

"This is the biggest event we've ever had here, so we had to come down and feel the vibe," she said.

So too with cousins Redonna Carpenter-Woods, 46, and Theresa Edward-Dymally, 48, who decided this was an event they couldn't pass up and drove up from the north San Fernando Valley.

"It's really a once-in-a-lifetime thing," said Carpenter-Woods, who wore a white summer dress and a matching sun hat.

Carpenter-Woods, a bank vice president, and Edward-Dymally, a school psychologist, said they were at first a little put off by the price of the tickets. Then they decided to splurge.

"I had a garage sale and bought one," Carpenter-Woods said jokingly.

So, why the fascination with the royal couple?

"They have just stepped into the limelight so beautifully," said Denise Berry, 40, of Los Angeles, who has been going to the polo club to see her father, now 73, play since she was a girl.

"They are just so together, so elegant and so handsome," Berry said.

Proceeds from the event benefited the American Friends of the Foundation of Prince William andPrince Harry, which focuses particularly on disadvantaged youths, the environment and the armed forces. This is Catherine's first visit to the United States, and William's first on official business.

On Friday, the couple attended a technology conference at a Beverly Hills hotel and a private reception at the Hancock Park residence of the British consul general.

On Saturday night, they headed to an exclusive black-tie affair at the Belasco Theater in downtown Los Angeles, hosted by the British Academy of Film and Television Arts. William is president of the organization.

Hours before the couple were due to arrive downtown, spectators had lined up behind barricades to wait for them.

Carol Untalan, 47, who collects magazine articles and books about the couple, drove down from San Francisco with her 15-year-old daughter.

"It's the love story I fell in love with, and that's why I fell in love with them," she said.

Catherine and William arrived a couple of minutes past 8 p.m. Exiting a black Range Rover to cheers from the crowd, the two walked leisurely down the red carpet, shaking hands and graciously smiling to a clutch of lucky admirers.

William wore a tuxedo, and Catherine wore a light gray chiffon dress with a glittery white band at the waist.

On Sunday, the couple's last day in Los Angeles, they will attend an arts event on skid row and a job fair in Culver City.

WRAPUP 1-Obama faces new obstacles in high-stakes debt talks

* Taxes, entitlement cuts still a sticking point
* Talks scheduled for Sunday at White House
By Matt Spetalnick
WASHINGTON, July 10 (Reuters) - President Barack Obama will seek to salvage high-stakes debt talks on Sunday after Republicans pulled back from a joint effort to craft a broad $4 trillion deficit-reduction deal as part of a plan to avoid a U.S. government default.
On the eve of bipartisan negotiations hosted by Obama, House of Representatives Speaker John Boehner -- facing stiff opposition from fellow Republicans over the prospects of higher taxes as part of a large-scale deal -- told the Democratic president he would only pursue a smaller, $2 trillion package.
Boehner's decision threatened to thrust Sunday's White House meeting between Obama and congressional leaders into disarray as the clock ticked down on the Aug. 2 deadline for raising the national debt ceiling.
Failure to act could mean the first-ever default on the nation's financial obligations, which the White House and private economists warn could push the United States back into recession and trigger global financial chaos.
Aides to Obama and Boehner had been working on a far-reaching package of spending cuts and new revenue that would have reduced deficits by $4 trillion over 10 years and cleared the way for lifting the $14.3 trillion cap on the government's borrowing capacity.
But Boehner's move dampened hopes of any immediate compromise and raised doubts about the chances that Sunday's talks would start moving the budget debate toward an endgame.
"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Boehner, the top Republican in Congress, said in a statement. "I believe the best approach may be to focus on producing a smaller measure."
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What's on the table in U.S. debt talks [ID:nN1E75T1ZR]
US jobs stall, setting back recovery hopes [ID:nN1E7670C0]
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BIG DIFFERENCES REMAIN
Boehner and Obama, whose 2012 re-election prospects are tightly linked to U.S. economic and fiscal health, spoke by phone on Saturday and failed to resolve key differences over taxes and entitlement spending.
But after Boehner's announcement, the White House said Obama would not "back off" his efforts toward a comprehensive deal and suggested he might try to change the Republican's mind. Sunday's session is set for 6 p.m. EDT (2200 GMT).
"Both parties have made real progress thus far," White House communications director Dan Pfeiffer said. "Tomorrow, he will make the case to congressional leaders that we must ... take on this critical challenge."
Obama had summoned congressional leaders to lay out their "bottom-line" demands for what the White House has billed as vital phase in the quest for a sweeping budget agreement.
There had been growing pressure from rank-and-file lawmakers who must approve anything hammered out in closed-door White House talks. Critics on the left and the right had voiced unease at some options on the table, and they are now expected to dig in their heels even further.
The biggest obstacles to an agreement remain.
Democrats want to shield popular domestic programs from huge cuts and say that any deal must include increases in tax revenue, including an expiration of Bush-era tax cuts on wealthier Americans.
Republicans -- under pressure from Tea Party conservatives -- reject any increased taxes and want curbs on popular benefit programs such as Medicare, Medicaid and Social Security.
The stakes are high for Obama. His 2012 re-election hopes hinge not only on reducing America's 9.2 percent unemployment but on his appeal to independent voters who want tougher action to get the country's fiscal house in order.
But Boehner and other mainstream Republicans do not want to be blamed for the economic turmoil that could be unleashed by any government default on its debt.
For his part, Obama is risking a mutiny on the left flank of his party for even agreeing to discuss entitlement programs traditionally protected by Democrats and which many feared would have been curbed under a $4 trillion plan.
Aides to Obama and Boehner were also discussing revenue increases that would have been achieved in part by a streamlining of the tax code, something that appeals to both Democrats and Republicans.
But Democrats' demands for $1 trillion in additional revenue also include eliminating tax breaks and other measures that many Republicans were reluctant to support.
Leana Fallon, an aide to House Republican Leader Eric Cantor, urged that the talks focus on a framework for between $2 and $2.5 trillion in cuts discussed in meetings led by Vice President Joseph Biden in May and June that ended in impasse.
Democratic Representative Chris Van Hollen blamed the abandonment of a bigger deficit-reduction goal on a "Republican fixation with protecting tax breaks for corporate special interests and the very wealthy."
Republicans want an agreement for at least $2 trillion in cuts as the price for a debt limit increase big enough to accommodate borrowing needs through the 2012 election.
Obama spent Saturday at the Camp David presidential retreat in Maryland and was due to return for the rare Sunday talks, his second session with bipartisan leaders in four days. (Additional reporting by Caren Bohan, Thomas Ferraro, Andrew Sullivan and Steve Holland; Editing by Eric Walsh)

Healthy loan growth gives good start to HDFC in 2011-12

MUMBAI, JULY 8: 

A healthy growth in loans to individuals and corporate bodies saw Housing Development Finance Corporation Ltd (HDFC) report a 22 per cent increase in net profit in the April-June 2011 quarter. In the reporting quarter, HDFC posted a net profit of Rs 1,176 crore, against Rs 967 crore in the corresponding period last year.

Year-on-year, the loan book of India's biggest housing finance company increased by 22 per cent to Rs 1,24,168 crore as on June-end 2011 (Rs 1,01,625 crore as on June-end 2010). In the reporting quarter, HDFC's loan book nudged up by 6 per cent (or Rs 7,041 crore).

“We have not seen even a marginal slowdown (in demand for home loans). Our loan book grew at 22 per cent. We don't see a slow down yet,” said Mr Deepak Parekh, Chairman, in an interaction with the media after HDFC's annual general meeting.

Referring to the huge shortage in housing and large builders coming up with affordable home projects, Mr Parekh emphasised that the demand for housing was still there.

To a question on demand for home loans getting impacted due to rising interest rates, he said “If interest rates go up by 100- 200 basis points it is not going to impact the demand. But if it increases by 400 -500 bps then we can't tell.”

Deposits rose by 28 per cent year-on-year to Rs 30,500 crore as on June-end 2011, against Rs 23,906 crore as on June-end 2010. The spread on loans over the cost of borrowings for the quarter stood at 2.30 per cent (2.34 per cent).

As on June 30, 2011, the unrealised gains on HDFC's listed investments amounted to Rs 23,206 crore (Rs 21,392 crore as on March-end 2011). This excludes the appreciation in the value of unlisted investments, the company said in a statement.

Gross non-performing loans as at June 30, 2011 amounted to Rs 1,038 crore (Rs 905 crore as of June-end 2010). This is equivalent to 0.83 per cent of the loan portfolio (previous year: 0.98 per cent).

Based on a six months overdue basis, the non-performing loans as at June 30, 2011 stood at 0.55 per cent of the loan portfolio as against 0.54 per cent in the previous year.

HDFC's capital adequacy ratio was lower at 13.8 per cent of the risk weighted assets as of June-end 2011, against 14.8 per cent as of June-end 2010. Tier 1 capital was 12.2 per cent (13.6 per cent).

HDFC's shares closed at Rs 711.95, down 1.49 per cent, on the BSE, on Friday.

Keywords: loan book, Deepak Parekh, capital adequacy ratio, NPAs