The industry superannuation fund First Super says it is selling its investment in News Corporation due to concerns about the company's corporate governance.
In October, News Corp's chairman and chief executive, Rupert Murdoch, stared down a protest vote by funds from around the world, including First Super, over his controversial dual role at the helm of the company.
First Super has 72,000 members in the timber, paper and furniture industries and controls $1.7 billion of retirement savings.
The fund is partly controlled by the Construction, Forestry, Mining and Energy Union.
First Super co-chair and CFMEU national secretary Michael O'Connor says the company will sell its holding over the next few months.
"We're certainly concerned about the fact that they have an executive chair.
We believe there should be more independent directors, and we believe that the role of the chief executive officer and the chairperson should be separated," he said.
"Institutional shareholders put those proposals at the last shareholders meeting.
They were rejected by the management.
As a consequence our fund has made a decision to disinvest because they [News Corp] don't meet our standards of good corporate governance." At the time of the AGM, Rupert Murdoch advised investors who were unhappy about News Corp's governance structure to sell out of the company.
Mr O'Connor says First Super is heeding that advice, and is also concerned about the $US65.5 million paid to the top six executives of News Corp, which he says is three times the amount received by the top nine executives of BHP Billiton.
"Our board doesn't believe that any senior executive is worth four or five hundred times the average salary paid to their employees," he added.