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Foxtel, which is 25% owned by News Ltd, has finally responded to the scandal surrounding the business practices at some UK divisions of Rupert Murdoch’s News Group. News Group has been accused of engaging with a secret group to conduct high tech piracy during the period when the company was seeking to take control of the Australian pay-TV industry.Late yesterday the Australian Federal Police revealed that they are working with UK police investigating News Corporation practises.

In a story in the Media section of The Australian newspaper, (a Murdoch owned publication) it was reported that Foxtel, under chief executive Kim Williams who is now CEO of News Limited, had made considerable efforts to combat piracy and worked on a code of conduct, which was ongoing.

“News Limited and Foxtel have spent considerable resources fighting piracy in Australia. It is ironic and deeply frustrating that we should be drawn into a story concerning the facilitation of piracy,” News Limited said.

Foxtel, which is 25 per cent-owned by News Limited, has sought to distance the company from the piracy allegations because they are in the middle of delicate discussions with the ACCC to seek approval to take over Austrar, a company that News Limited stands accused of trying to damage as they grew their subscribers in Australia.

The BBC’s Panorama program claimed News Corporation recruited a hacker to unlock the smart cards used in pay-TV boxes by a competitor to its British satellite TV arm, BSkyB and in Australia.

The Australian Financial Review – owned by News rival Fairfax – yesterday claimed it had proof that a secret group within News Corp had promoted a wave of high-tech piracy involving pay-TV customer access codes that extended to Australia.

This had damaged Austar, Optus and Foxtel at a time when News was seeking to take control of the Australian pay-TV industry, the AFR claimed.

According to the AFR, covert operations in Australia were directed by the head of Operational Security for Asia-Pacific, Avigail Gutman, originally based in Taiwan, where her husband was the Israeli consul, before being promoted to be a group leader based in Jerusalem.

News Ltd yesterday issued a statement claiming it had done nothing illegal and the AFR story was full of “factual inaccuracies” and “fanciful conclusions”.

Using their own publication, they claimed the AFR allegations were rejected by News Limited in a strongly worded statement that accused the newspaper of “selective” reporting. “The story is full of factual inaccuracies, flawed references, fanciful conclusions and baseless accusations which have been disproved in overseas courts,” News Limited said.

“The notion that alleged NDS actions in Australia were done to undermine Austar so that Foxtel could bid for it 13 years later are so far-fetched as to be laughable.”

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