Fri, Dec 21, 2007 - Page 12 News List

UFO fined over BCC takeover

RADIO RUMPUS The Fair Trade Commission accused Jaw Shaw-kong of illegally merging the broadcasting firms after he inserted his UFO management team at BCC

By Jerry Lin  /  STAFF REPORTER

The Fair Trade Commission (FTC) yesterday imposed a fine of NT$3 million (US$92,000) on UFO Network (飛碟廣播公司) for failing to report its takeover of Broadcasting Corporation of China (BCC, 中國廣播公司), an FTC official told reporters yesterday.

"According to the FTC's regulations, when a takeover increases a company's market share to more than 25 percent, the company must report to the FTC before the deal can be approved," said Liu Ming-hui (劉明暉), the senior secretary of the FTC.

BCC alone, which has a 63 percent share in the local broadcasting market, far exceeds the FTC's reporting criteria, he said.

Even when using the radio station's ratings to calculate market share, the two broadcasting companies' combined ratings still exceeded one-third of the northern Taiwan market, which also met the FTC's reporting criteria, Liu said.

"Our decision was based on the fact that UFO Network's market share, after its merger with BCC, met the FTC's reporting criteria. But UFO Network failed to report," FTC commissioner Chou Ya-shu (周雅淑) told reporters, adding that UFO Network's failure to report had been intentional.

The FTC said Jaw Shaw-kong (趙少康), chairman of BCC, had illegally merged the two broadcasting companies after inserting his own management team from UFO at BCC.

"At least 10 out of the 16 managers of the eight companies [including four other subsidiary companies he set up specifically to buy BCC shares] are UFO employees," Chou said.

The eight companies that own BCC shares include four UFO subsidiary companies that bought KMT-affiliated Hua Hsia Investment Holding Co's (華夏投資公司) stake. Hua Hsia had owned 97 percent of BCC. The four companies were all created around Sept. 20 last year specifically for the takeover.

Jaw and his wife Liang Lei (梁蕾) invested more than 58 percent of the NT$63.531 million required to buy the BCC shares from Hua Hsia, the FTC's figures showed.

Liang, who owns 34 percent of UFO Network, is the largest UFO Network shareholder.

"This is political oppression," Jaw told reporters yesterday in response to the FTC's ruling.

He said he had failed to report the merger because the Cabinet had previously revoked the National Communications Commission's ruling that approved his appointment as BCC chairman.

He said he was not aware of the need to report the merger to the FTC since the government's agencies were at odds over his chairmanship of BCC.

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