A big global fund manager has said that Lachlan Murdoch's role in failed Australian phone group One.Tel had raised questions about his fitness for the top job one day at News Corp.
While One.Tel was too small to be an investment for the global funds of the world's largest listed fund manager, Alliance Capital Management, the telco's collapse with more than AU$600 million in debts had attracted interest because of Murdoch's backing of the company.
"One.Tel did register," said Sandra Yeager, one of four portfolio managers handling more than US$30 billion in funds for Alliance Capital's Global/International Equity Group.
The global investment funds only Australian stock holding at the moment is News Corp.
"As a News Corp shareholder, when you know that this company is going to the kids, and Lachlan is the main guy and this is his record - he's taking his knocks early in life - you do think about it," she told reporters.
One.Tel's two major backers were News Ltd and Publishing & Broadcasting Ltd, chaired respectively by the sons of media tycoons Rupert Murdoch and Kerry Packer.
The young Murdoch and Packer were enthusiastic supporters of the telco's strategy to build a business by grabbing phone customers from their bigger Australian rivals and said they had no idea One.Tel was insolvent before late May.
