NBTC probe into large buy-up of NMG stocks

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NBTC probe into large buy-up of NMG stocks
Watchiranont Thongtep
The Nation

BANGKOK: -- Questions raised on Solution Corner's 12.27-per-cent acquisition and whether it violates cross-holdings rule

A broadcasting regulatory body is probing a controversial deal involving software and IT solutions provider Solution Corner (1998) Plc to determine whether its acquisition of a 12.27-per-cent equity stake in Nation Multimedia Group breached the digital TV auction rule on cross-holding.

SLC is the parent company of Spring News Television Co Ltd, operator of digital channel Spring News TV.

NMG operates two digital TV channels - news channel Nation TV and variety channel Now 26 - via its subsidiaries.

Thawatchai Jittrapanun, a member of the National Broadcasting and Telecommunications Commission who also chairs the subcommittee governing broadcasting competition, told The Nation that a legal team was investigating the details of the deal and the result would be known next week.

In reference to the auction rule for the 24 commercial digital-terrestrial TV channels, Thawatchai said that each bidder could hold a maximum of three different licences, but was not allowed to hold more than one licence in the same category in order to prevent market domination.

SLC's acquisition of NMG shares has raised questions over whether this action violated the cross-holding law governing the news-channel category.

According to appendix Part I of the rule, a major shareholder is defined as a person or juristic person who holds more than 10 per cent of a company's total shares.

According to appendix Part II, anyone with a voting power exceeding 25 per cent of the company's total shares is defined as a major controller.

Under the rule, major shareholders and controllers are not allowed to hold more than one licence in the same category.

SLC holds a 100-per-cent stake in Spring News Television, while NMG operates Nation TV via its wholly owned subsidiary NBC Next Vision Co Ltd.

The NBTC divided the 24 digital TV channels into four categories: seven variety channels in high definition; seven variety channels in standard definition; seven news channels in standard definition; and three family channels in standard definition.

SLC chief executive officer Arak Ratboriharn said yesterday that the company aimed for a long-term investment and expanded collaboration with its alliance media partners after it invested in GMM Grammy Plc and NMG.

SLC's board of directors on Thursday acknowledged the company's investment in GMM of 10 million new shares at Bt13.50 per share and the acquisition of the NMG stake and warrants.

GMM's main target audience was teenagers, while NMG had an integrated media business, Arak said on FM97's Business Move Programme yesterday while insisting SLC would not interfere in the operations of NMG.

Spring News TV has a different viewership to NMG, he said.

Arak said that discussions had taken place between top executives from SLC and NMG, citing NMG's desire for SLC to investment in it.

There was no reason to change NMG's direction, as that would hurt SLC, he said.

"SLC will finance its purchase of NMG shares with the proceeds of its capital increase," he said.

Arak said that SLC would, in the next few days, also sign a primary agreement with T News to do due diligence on the latter's financial status, in a move that could result in SLC strengthening its provincial base and expanding its business.

Several Korean partners would join the planned investment in T News, he said, adding that the media should serve as one factory for several products to reduce costs.

He said each company would sell its product to a target group and in the process strengthen itself amid higher competition in the near future.



Digital TV rules on cross-holdings

l Any bidder can hold no more than three licences of different categories;

l The major shareholder or controller of a company running a digital TV station is not allowed to hold more than one licence in the same TV category;

l A major shareholder is defined as an individual or juristic person who holds more than 10 per cent of shares;

l A major controller is defined as an individual or juristic person who has power for votes exceeding 25 per cent of total shares.

Source: http://www.nationmultimedia.com/business/NBTC-probe-into-large-buy-up-of-NMG-stocks-30250305.html

-- The Nation 2014-12-20