Because of concerns about the involvement of government investment, Taiwan Mobile Co’s (台灣大哥大) plan to buy a majority stake in Kbro Co (凱擘) is still in limbo seven months after the bid was announced, the National Communications Commission (NCC) said yesterday.
The Cable Television Act (有線電視法) bars government agencies, political parties and the military from investing directly or indirectly in media companies such as cable system operators.
The approval of the nation’s media regulator is the final hurdle remaining for the deal, in which Taiwan Mobile offered to buy a 32 percent stake in Kbro from the Carlyle Group for NT$32.8 billion (US$1 billion) before the June 30 deadline to gain control of the nation’s No. 2 cable TV operator.
The Fair Trade Commission approved the merger in December.
“We are not worried about the deadline. As both sides intend to push this deal through, we can extend the deadline,” Taiwan Mobile spokesperson Josephine Juan (阮淑祥) said by phone.
NCC spokesperson Chen Jeng-chang (陳正倉) confirmed yesterday that both Carlyle Group managing director Gregory Zeluck and Taiwan Mobile vice chairman Daniel Tsai (蔡明忠) have spoken to the commission to clear up some of the regulator’s concerns.
The NCC sought to clarify the legality of the deal because if the deal goes through, the Taipei City Government would indirectly hold shares of Kbro.
“The questions we asked included how they plan to safeguard shareholders’ interests and how they plan to improve the quality of programs,” Chen said.
“Some commissioners were also concerned about other potential problems if the NCC approved the application for an ownership change, such as whether Taiwan Mobile would abuse its position to establish a monopoly in the market,” Chen added.
The Taipei City Government acquired a 15 percent stake in Fubon Financial Holding Co (富邦金控) after the government-owned Taipei Bank (台北銀行) — in which it held a 44 percent stake — was absorbed by Fubon Bank (富邦銀行) in 2005. Fubon Financial is the parent company of Taiwan Mobile.
Juan said Taiwan Mobile hopes the problem can be resolved by amending the Cable Television Act to better suit the market situation.
However, Chen said that until the legislature passes an amendment to the Cable Television Act, the government, political parties and the military still cannot invest in cable TV operators either directly or indirectly.
Chen said the commission had asked Taiwan Mobile to submit more documents for further review.
Last year, five cable system operators owned by Taiwan Fixed Network (台灣固網), a unit of Taiwan Mobile, were fined a total of NT$500,000 for having investments from the government, political parties or the military.
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