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Shares in News Corporation recovered ground after Rupert and James Murdoch’s appearance in front of a committee of British MPs.

At the close of trading in New York, News Corp shares were 6% higher.

The move recovers some of the losses sustained as the phone-hacking scandal at its newspaper title, the News of the World, has unfolded.

But pressure on the company continues, with another major shareholder questioning the company’s standards.

The giant Californian public pension fund, CalPERS, has joined the list of those who are unhappy with the way the company has been managed.

CalPERS (California Public Employees’ Retirement System), which owns 6.4 million of News Corp’s shares, is in particular unhappy with the shareholding structure that gives the Murdoch family’s ‘B’ shares voting rights, meaning that although they own 12% of the company, they hold the biggest single block – 40% – of the votes.

Other ‘B’ shares are largely held by unnamed investors.

Family power

More than two thirds of the shares are ‘A’ shares, which give investors no say as to who sits on the board, let alone major strategic decisions such as whether to bid for another company.

Its Senior Portfolio Manager, Anne Simpson, who heads its corporate governance program, said: “News Corp does not have one share one vote. This is a corruption of the governance system.

“Power should reflect capital at risk. CalPERS sees the voting structure in a company as critical. The situation is very serious and we’re considering our options. We don’t intend to be spectators – we’re owners.”

Other financially interested parties have this week reviewed their opinion of the strength of the company.

On Monday, the ratings agency Standard & Poor’s placed News Corp’s credit rating on a negative watch citing “increased business and reputation risks”.

Also on Monday, another of its shareholders urged it to raise its standards.

The Nathan Cummings Foundation in New York, a small shareholder in News Corp, wrote to the board asking it to improve its transparency and governance:

The Foundation is concerned about News Corp’s political lobbying, particularly payments to organisations that have then campaigned for looser regulation which could potentially benefit its businesses.

News Corp has reorganised its standards committee, set up to investigate impropriety at News International.

News Corporation is the parent company of News International, which runs the Sun, the Times and Sunday Times. Their sister paper, the News of the World, was shut down earlier this month as a result of the phone-hacking scandal.

News Corp is one of Australia’s best-known companies and most widely held shares

Shares of News Corporation, the company owned by Australian billionaire Rupert Murdoch, have dropped almost 6% to a two-year low.

The slide comes as an investigation into phone hacking in the UK has widened and a key figure was arrested.

News Corp owns the two newspapers at the heart of the scandal, The Sun and the now closed News of the World.

In morning trading in Sydney, the shares were down 5.5% at 13.91 Australian dollars (£9.20).

Its shares have lost almost a fifth of their value since the start of July.

Widening probe

News Corp is the parent company of News International, which runs The Sun, the News of the World, The Times and Sunday Times.

On Sunday, ex-News International chief executive Rebekah Brooks was arrested by police in the UK on suspicion of conspiring to intercept communications and on suspicion of corruption.

Mrs Brooks has denied wrongdoing and was released on bail at midnight (2300 GMT).

In another twist, Metropolitan Police Commissioner Sir Paul Stephenson stepped down for his part in the phone hacking scandal.

Sir Paul, Britain’s most senior police officer, was criticised for hiring former News of the World executive Neil Wallis – who was questioned by police as part of the probe into hacking – as an adviser.