James Murdoch, son of News Corp. chief executive Rupert Murdoch and head of News International, has stepped down as executive chairman of the embattled British newspaper division, the company announced on Wednesday.
His resignation comes on the heels of the growing U.K. investigation into News International's phone-hacking activities, and less than a week after the division launched a new Sunday tabloid, the Sun on Sunday, which was overseen by Rupert Murdoch himself.
There are at least three open investigations into phone hacking at News International -- the most recent at the Sun. News Corp. says it's cooperating with British authorities. Earlier this month, five Sun staffers were arrested in an ongoing probe into journalists paying for tips from police. More than 20 people have been arrested since the phone-hacking investigation began.
The 39-year-old James was named deputy chief operating officer of News Corp. last March, three months before the phone-hacking scandal erupted. On Wednesday, the company said James would remain in the deputy COO role. Tom Mockridge, News International CEO, will continue in his post and will report to News Corp. president and COO Chase Carey, the company said.
In a statement, the elder Murdoch said James would "continue to assume a variety of essential corporate leadership mandates, with particular focus on important pay-TV businesses and broader international operations." And James Murdoch added in a statement: "As deputy chief operating officer, I look forward to expanding my commitment to News Corporation's international television businesses and other key initiatives across the company."
James Murdoch has repeatedly denied direct knowledge of phone-hacking activities at News International. He last testified before a select Parliament committee in November, denying he misled them when he testified in July that he had not been shown an email from former editors at News of the World suggesting the phone-hacking was widespread at the company.
Despite questions surrounding his testimony, there's no indication that an arrest of James Murdoch is in the works, though, as the BBC's Raymond Snoddy wrote on Twitter, "[It's] interesting that James Murdoch re-located to the States before resigning as executive chairman of News International -- how convenient."
But his resignation further dims the prospect of James Murdoch taking over for his father if and when the 81-year-old Rupert retires.
At last year's shareholders meeting, James and Lachlan Murdoch managed to retain seats on News Corp.'s board of directors. But Carey, who also has a board seat, is now seen as a possible successor to Murdoch, should the company look outside the Murdoch family.
"In any other industry," the U.K.'s Independent wrote in an editorial published Wednesday before James' resignation, "a boss could not survive evidence of malpractice requiring no fewer than three separate police investigations."
"If [James] can concentrate on running those TV interests alone," BBC business editor Robert Peston wrote, "together with chairing British Sky Broadcasting, maybe his reputation -- damaged by the phone-hacking scandal -- can be rebuilt."
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