Media giant New Corporation's decision to extend its 'poison pill' defense against the feared predations of John Malone's Liberty Media has come under fire from Australian institutional investors.

The move, announced by NewsCorp chairman/ceo Rupert Murdoch late last week, came as an unpleasant surprise to some stockholders.

They claim the extension is a "direct breach" by the board of its governance pledge last year, given as a quid pro quo for shareholder approval of the group' reincorporation from Australia to the more business benign US state of Delaware.

The poison pill, or "shareholder rights plan", was put in place in November when US cable TV mogul Malone acquired a voting stake in NewsCorp of nearly 18%. This was too close for comfort to the Murdoch clan's 29.5% holding via which it ontrols the company.

NewsCorp has defended its actions saying the move will prevent Liberty acquiring any more voting stock without consultation.

But this argument cuts little ice with the Australian Council of Super Investors. Says president Michael O'Sullivan: "Shareholders will now be denied any benefit from an offer by Liberty or anyone else to increase their holding [in News Corp] to a substantial level. The poison pill benefits only the Murdoch interest."

Data sourced from Financial Times Online; additional content by WARC staff