News Corp. Chief Operating Officer Chase Carey, reacting to thescandal over phone hacking at the News of the World tabloid, isholding discussions with some large investors over governance andother concerns.

The California State Teachers' Retirement System, which held3.86 million News Corp. Class A shares as of June 30, plans to meetwith top officials soon, said Ricardo Duran, a spokesman.

“Calstrs is involved in the engagement process, which includessending letters, holding conference calls and meetings, with NewsCorp. management,” Duran said in an e-mail. “Because this isdelicate, we cannot say anything further about our efforts.”

The outreach by News Corp., owner of Fox Broadcasting and theWall Street Journal, reflects investor concern over successionplans for Chairman and Chief Executive Officer Rupert Murdoch, theuse of capital and family control of the company in the wake of thescandal, two people with knowledge of the situation said.

Carey, Murdoch's second-in-command who also holds the title ofpresident, and David DeVoe, the company's finance chief, areconducting the briefings, according to a fund manager who wouldn'tdiscuss the matter publicly and isn't planning to take part.

Julie Henderson, a spokeswoman for New York-based News Corp.,declined to comment.

Meeting Request
The California PublicEmployees' Retirement System, which was aware of the discussions,won't be participating, said Brad Pacheco, a Calpers spokesman. Thepension fund for state workers owns 5 million Class A nonvoting and1.38 million Class B voting shares, according to Bloombergdata.

Last month, after the Guardian newspaper in the U.K. reportedNews Corp.'s now-defunct News of the World tabloid had hacked thevoicemail of a murdered schoolgirl, the company hired consultantSard Verbinnen & Co. to survey investors.

Since then, executives including Murdoch and his son James, NewsCorp.'s deputy chief operating officer, have faced questions aboutthe accuracy of testimony they gave to a British Parliamentarypanel investigating the hacking and the company's response toit.

Investors led by Glenview, Illinois-based Wespath InvestmentManagement, representing stockholders with 1.31 million News Corp.shares, requested a meeting with lead independent board memberRoderick Eddington in an Aug. 5 letter.

Anita Green, a spokeswoman for Wespath, declined to say thisweek whether the investors would be meeting with management of NewsCorp.

Succession, Acquisitions
In an earningscall on Aug. 10, News Corp. addressed some of the investors'concerns, including who might succeed Murdoch as CEO. Murdochcontrols the company through ownership of almost 40 percent of thevoting stock.

“I hope that the job won't be open in the near future,” Murdochsaid. “Chase is my partner. If anything happened to me, I'm surehe'll get it immediately if I went under a bus. But in the end,succession's a matter for the board.”

Carey, in turn, addressed possible acquisitions, saying thecompany “will focus on modest investments, those in the tens orhundreds of millions, not billions.”

Because of the scandal, News Corp. was forced to abandon its7.8-billion-pound ($12.8 billion) bid for the 61 percent of BritishSky Broadcasting Group Plc it doesn't own.

Share Drop
The British law firm Harbottle& Lewis released letters on Aug. 16 that said Rupert Murdoch,80, gave “inaccurate and misleading” statements to Parliamentexplaining why News Corp. had hired the law firm in 2007 to examineone phone-hacking allegation. Two former News of the Worldexecutives said they told James Murdoch in 2008 the practice waswidespread, contradicting the younger Murdoch's testimony to thepanel.

News Corp. fell 63 cents, or 3.9 percent, to $15.56 at 4 p.m. inNasdaq Stock Market trading. The Class A shares have declined 14percent since the Guardian reported on July 4 that News of theWorld accessed the voicemail of murdered teenager Milly Dowler.

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