Thailand says it will take control of the nation’s only private
television broadcaster if it fails to meet a deadline next week to pay
$US2.8 billion in fines and overdue fees.
The battle over iTV marks the latest move by the military-backed government
against companies controlled by Shin Corp, a telecom giant founded by
deposed prime minister Thaksin Shinawatra.
Shin Corp was bought last year by Singapore’s state-linked investment firm Temasek, sparking a popular uproar that eventually led to the coup against
Thaksin in September.
The takeover threat came after iTV lost a court battle over its concession fees. The company faces a March 6 deadline to settle the overdue fees and fines.
“We have to revoke the concession because iTV cannot pay the amount of money ordered by court,” Finance Minister Pridiyathorn Devakula said.
“We have no any other choice. We need to cancel its concession because we are the owner of airwaves,” he said.
ITV began broadcasting mainly as a news network in 1996, as the only
free-to-air station in Thailand not run by either the government or the
Thai press freedom groups are worried that a
government takeover would destroy what little independent reporting
still exists on the nation’s airwaves.
“This would be a step backward for media,” said Supinya Klangnarong, who heads the Campaign for Popular Media Reform.
“Taking control of iTV will mean that all the stations have the same news
reports. Having iTV as a private, independent station is a way to
balance the news reports,” she said.
The Thai Broadcast Journalists Association urged the government not to take over iTV, but to help the company restructure to settle its debts before returning as an independent station.
ITV Faces Loss of Concession in Thailand
Thailand’s iTV television network, the country’s only network not
owned by the government, will lose its broadcasting concession if it
fails to pay millions of dollars (euros) in unpaid fees by March 6, the
finance minister said Tuesday.
“If iTV fails to pay the fine there is no other option,” Finance Minister Pridiyathorn Devakula told reporters after a Cabinet meeting. He added that if the government “doesn’t do anything we will look like clowns.”
He said that programming would be continued and employees would not lose their jobs if the company is taken over by the government.
In what amounted to a surrender to the inevitable, iTV said later Tuesday that it would not be able to pay the nearly 100 billion baht (US$2.9 billion; euro2.2
billion) in fines, unpaid fees and interest that the government has
demanded by March 6, and has exhausted all efforts to reach a
Niwatthamrong Boonsongpaisan, the executive chairman of iTV, said the company would cooperate with the government for a smooth transition of ownership.
The television station is part of the former telecommunications empire of deposed Prime Minister Thaksin Shinawatra, whose Shin Corp. conglomerate – sold to the Singapore government’s investment arm, Temasek Holdings, in January 2006 – is its majority owner.
A court ruled last year that changes made by an arbitrator to the terms of its concession contract with the government were illegal, prompting the Prime Minister’s Office, which granted the concession, to demand the fines, unpaid fees and interest.
The station lost its final appeal in December, and could get no relief from either its creditor or the courts.
Pridiyathorn said that if iTV is taken over by the government, it probably will not be able to use the same name, which stands for Independent TV.
The decision to set up iTV came after 1992 pro-democracy street protests
that overthrew Thailand’s then-military-backed government. Television
stations at the time – all owned by the military or the government –
were restricted from broadcasting the protests, prompting the creation
of a more impartial news station. The granting of the concession was
part of a broad movement to promote greater democracy, including a new
After Shin Corp. took over iTV in 2001, it drew
criticism for lacking impartiality, particularly in coverage of
The broadcaster posted a net loss Monday of 1.78 billion baht (US$53 million; euro40 million) in 2006, compared with a net profit of 679 million baht a year earlier, mainly because of huge provisions for concession fees and penalty interest charges.
A TV Station on the Verge of a Takeover in Thailand
BANGKOK, Feb. 27 —Thailand is poised to take over a television station once controlled by its former prime minister, Thaksin Shinawatra,
who was ousted in a coup in September. The move would end a long
dispute between the broadcaster and the military-appointed government,
but would leave the future uncertain for the only private station in
The government said Tuesday that it would
terminate the license of the station, iTV, if the broadcaster did not
pay a $2.9 billion fine by next Tuesday. The station, which has a
market value of $34 million, said that sum would be impossible to pay.
ITV is not related to the British broadcaster of the same name.
The decision is a setback for Temasek Holdings of Singapore, which led
a group of investors in January 2006 in a takeover of Shin Corporation,
the company that controls iTV, from Mr. Thaksin’s family.
government’s effective nationalization of the station, which represents
about 1 percent of the market value of Shin’s assets, should have
little financial impact on Temasek. Temasek is not liable for the fine
and does not face the prospect of paying severance for iTV’s employees,
who the government said would not be laid off.
government is investigating several aspects of the deal between Mr.
Thaksin and Temasek, but analysts said that the iTV case was distinct
from the other investigations.
“This is a separate issue,” said
Korn Chatikavanij, a former banker and deputy secretary general of the
Democrat Party, which has been vocal in criticizing Mr. Thaksin’s deal
“They owe the government,” Mr. Korn, said
referring to iTV. “The courts have all ruled in favor of the fact that
the penalty has to be paid.”
The government’s case against iTV
dates to 2002, well before Temasek’s deal with Mr. Thaksin. Set up in
the 1990s, iTV was given a 30-year broadcast concession on the
condition that it mainly broadcast news. When Mr. Thaksin was prime
minister, iTV was offered a lower annual concession fee and was allowed
to increase its entertainment content at the expense of news.
But last May, a Thai court rescinded these benefits and ordered iTV to
return to its mostly news format and to pay a 97.8 billion baht ($2.9
billion) fine as well as back fees and interest.
Richard Moe, a
telecommunications analyst at Macquarie Securities in Bangkok, said the
government was taking over the company because it wanted to preserve
jobs at the station.
“The government doesn’t want to be draconian in terms of upsetting the lives of the employees,” Mr. Moe said.
In making the announcement Tuesday, Pridiyathorn Devakula, the Thai
finance minister, said that “no employee will lose his job, and all the
programs will be continued.”
The conflict between Thailand and Singapore over Shin Corp. escalated this week, with the Thai junta threatening to seize a television network that Singapore’s Temasek Holdings acquired when it bought Shin from then-Prime Minister Thaksin Shinawatra.
Finance Minister Pridiyathorn Devakula said the Thai government would seize Shin Corp.’s iTV
subsidiary if the broadcaster doesn’t pay 100 billion baht ($2.9
billion) in fines by March 6 for not showing enough news and
educational programs and failing to pay in full for a license.
Shares in Shin Corp. dropped 8.52% on the news to 24.7 baht (72 cents) Wednesday.
“It’s impossible for iTV to pay that money” iTV director Niwattumrong Boonsongpaisan said, according to the Business Times of
Singapore. The executive chairman of Shin Corp., Boonklee Plangsiri,
stepped down as chairman of iTV on Monday, and government officials
made public comments about taking over management.
Exchange of Thailand suspended trading of iTV shares Tuesday following
the government’s announcement that it would terminate iTV’s
broadcasting licence if it fails to pay by deadline. Shin owns 53% of
The Thai government also raised doubts about licenses held by Shin’s two other subsidiaries, Shin Satellite and cellular service provider Advanced Info Service.
all appears to be part of a campaign by the Thai government to put
pressure on the Singapore government-linked Temasek Holdings to return
its controlling stake in Shin to Thailand.
In January last year,
the Thaksin family sold their controlling stake in Shin to Singapore’s
Temasek Holdings at $1.9 billion. The tax-free transaction angered the country and helped pave the way for the coup in September in which Thaksin was overthrown.
political turmoil and internal uncertainties have taken a toll on the
company’s operations. On Tuesday, Shin reported a sharp 60.5 % decline
in profit for 2006 to 3.4 billion baht ($99 million) due largely to
weaker earnings from core units Advanced Info Service, Shin Satellite
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