A potential conflict between the Chinese Nationalist Party (KMT) and Government Information Office (GIO) gained momentum yesterday as rumors circulated that the KMT has signed preliminary agreement to sell its media holdings to a foreign-based company.
The rumors, printed in Chinese-language papers yesterday, claimed that the KMT has already agreed to hand over its five party-owned media outlets to venture capital firm Sycamore Ventures by the end of this month. If true, the alleged deal with the New Jersey-based firm could cost the KMT-owned television network China Television (CTV) its operating license, given recent GIO warnings.
KMT spokesperson Alex Tsai (蔡正元) yesterday denied that any final agreement had been signed, but said that negotiations for the stock sale were "going smoothly."
During a phone interview with the Taipei Times, KMT deputy spokesperson Kuo Su-chun (郭素春) echoed Tsai and denied that the KMT had signed any preliminary agreement with Sycamore Ventures.
"Plans for the stock handover are still in progress. We are still considering offers from Sycamore and other companies," Kuo said yesterday.
The rumored deal is the newest development amid widespread speculation about the KMT's plans for its media holdings.
Through the party-run Hua-Hsia Investment Holding Co, the KMT owns a 65 percent stake in CTV and a 96.95 percent stake in BCC, a radio station that occupies 25 percent of all AM frequency stations and 13.96 percent of the FM frequency stations in the country. The party also has large shares in the Central Motion Picture Corp, the Central Daily News and China Daily News.
In accordance with the Broadcasting and Television Law (廣電法) passed last December, the KMT must release its hold on media outlets.
The law stipulates that political parties are no longer allowed to manage media outlets and demands the divestiture of government stakes in government or party-controlled terrestrial TV and radio stations by Dec. 26, next year.
Previous rumors have placed the deal at a possible NT$6 billion to NT$8 billion (US$176 million to NT$235 million) by having the party sell its shares in the five companies in a single block offering.
When asked about potential price tags for the block offering, Tsai said only that there were numerous issues to consider during cost calculations, such as employee benefits. In response to the sale rumors, GIO head Lin Chia-lung (林佳龍) warned Friday night that the KMT risks losing CTV's operating license if the party seals the agreement with Sycamore.
"If the deal really happens, we will revoke their license. If the party sells to foreign investors to rid itself of its media assets, the sale would then go against the Broadcasting Law. It would not be legal," Lin said.
Lin's warning echoed the GIO's resolution from Wednesday stating the GIO free to rescind the licenses of TTV and CTV should the state or party share owners sell their stakes in the companies to foreign or Chinese investors.
The resolution was made during a committee hearing to extend the operating licenses of TTV and CTV for two more years.
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