SLC stake in NMG 'may be in breach of rule'

[webfact]

SLC stake in NMG 'may be in breach of rule'
Watchiranont Thongtep
The Nation


Supinya

BANGKOK: -- Members of a broadcasting regulatory panel yesterday found grounds that a rule against cross-holdings may have been breached by the acquisition of an equity stake in Nation Multimedia Group by Solution Corner (SLC), according to one of them.

Supinya Klangnarong, a member of the broadcasting committee of the National Broadcasting and Telecommunications Commission (NBTC), said those attending yesterday's meeting could not agree on whether software provider SLC should be deemed as having violated the rule.

"The broadcasting committee members were split, but it was concluded that there were convincing grounds," Supinya said in a Twitter message.

She said some panel members, however, noted that SLC had not bid for digital-TV licences, while its subsidiary Spring News Television had.

The panel's weekly meeting failed to reach a conclusion on the issue, but it ordered its legal advisory team to investigate this controversial deal further to determine whether its acquisition of a 12.27-per-cent equity stake in NMG breached the digital-TV auction rule on cross-holdings.

NBTC acting deputy secretary-general Sombat Leelapata said the panel wanted to make sure it had enough and current information before making any decision on this issue.

"The result of this investigation will be known as soon as possible and will be submitted at the next meeting on January 5," he said.

Apart from the auction rule for the 24 commercial digital terrestrial TV channels, Sombat said the legal team would look into details of relevant regulations under the Broadcasting Act and the 2010 Act on Organisation to Assign Radio Frequency and to Regulate the Broadcasting and Telecommunications Services.

SLC chief executive officer Arak Ratboriharn insisted yesterday that he would continue to hold the shares, saying the deal complied with the rules of the Stock Exchange of Thailand.

Arak said he had no plan to sell his 1.22-per-cent stake in GMM Grammy and another 12.27 per cent in NMG. He was quoted by Infoquest news agency as saying they were part of the company's long-term investment and expansion plans through collaborations with its media partners through trading on the SET.

Arak added that the investment in GMM Grammy was not significant in terms of shareholding.

Regarding the shareholding and warrants in NMG, he said that after discussions with NMG chairman Suthichai Yoon, the company had decided not to appoint anyone from SLC to the NMG board though, by law, the company had the right.

He also said his company would not interfere in the management of NMG. He stressed that with a 12.27-per-cent stake, SLC would not be able to fully control the media partner.

Responding to the probe into this controversial deal by the broadcasting regulator, Arak explained that the investment in NMG was separate from its subsidiary Spring News Television, which holds a licence to operate terrestrial-based digital TV news station Spring News TV.

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 the rule laid down by the NBTC when it auctioned licences for the 24 commercial digital terrestrial TV channels, each bidder could hold a maximum of three different licences, but not more than one licence in the same category, in order to prevent market domination.

According to an appendix Part I to 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 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. SLC is the parent company of Spring News Television Co, operator of digital channel Spring News TV.

Source: http://www.nationmultimedia.com/business/SLC-stake-in-NMG-may-be-in-breach-of-rule-30250452.html


-- The Nation 2014-12-23