LONDON — U.K. media regulator Ofcom has ruled that satcaster BSkyB is “fit and proper” to hold a broadcast license, despite the phone-hacking scandal that has engulfed its principal shareholder, News Corp.

The regulator concluded that the TV company was not linked to the hacking and other wrong-doing that is alleged to have taken place at News Corp.’s U.K. newspapers, notably the now defunct weekly News of the World and daily tabloid The Sun.

However, the regulator criticized James Murdoch, the former chief exec and chairman of BSkyB, for his conduct during his time as chairman of News Intl., News Corp.’s British publishing division, which publishes the papers through a subsidiary, NGN.

“James Murdoch’s conduct in relation to events at NGN repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman,” Ofcom stated, concluding that Murdoch failed to root out wrongdoing at News Intl., and his handling of the issue raised questions about his competence.

“We consider James Murdoch’s conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged,” it stated.

News Corp. was quick to defend Murdoch, claiming there was “no evidence that James Murdoch deliberately engaged in any wrongdoing.”

The conglom disagreed “with certain of the report’s statements about James Murdoch’s prior actions as an executive and director, which aren’t at all substantiated by evidence.”

Murdoch is a non-executive director of BSkyB, but Ofcom said it was up to the satcaster’s board to decide whether he should remain one.

The regulator warned that its assessment of BSkyB’s “fit and proper” status was ongoing, and that it would reconsider its decision in the light of the findings of the Leveson Inquiry, which is looking at ethics in the media in general and the phone-hacking scandal in particular, and the results of pending criminal proceedings connected to activities at News Intl.