Fri, Jun 29, 2012 - Page 4 News List

Rumors of massive debts and malfeasance dog CTS

‘DERELICTION OF DUTY’:Besides allegedly covering up the TV firm’s losses, CTS chair Yaly Chao reportedly made a donation to an academic center that she once headed

By Chen Hui-chenand Chao Ching-yu  /  Staff reporters

As lingering controversy surrounding Public Television Service’s (PTS) governing body continues to unsettle the nation’s media industry, Chinese Television System (CTS), another TV channel affiliated to Taiwan Broadcasting System, has found itself embroiled in allegations of crippling debt and malfeasance on the part of its sitting chairman.

CTS, one of the country’s three oldest TV channels, had allegedly run up enormous debts that could be as high as NT$936 million (US$31.2 million) — more than half the company’s NT$1.6 billion capital — as of September last year, according to last year’s balance sheet, which was disclosed by an anonymous source familiar with the matter.

The financial statement also showed that over the next three months, the public broadcaster’s liabilities had increased by NT$42.3 million, to NT$978.3 million, as of December last year, a rapid debt accretion with which the company has struggled to keep up. In recent years it has rented out all of its unutilized media facilities.

Several of CTS’ studios have been rented to Formosa TV (FTV) and Super TV (STV) on a long-term basis, with some rented to Sanlih E-Television (SET TV) to screen the television drama of Gung Hay Fat Choy (我們發財了), and some to China’s popular video-sharing site Tudou.com for shooting variety shows.

Adding to the broadcaster’s financial upheavals and distress, allegations have emerged that its sitting chairperson, Yaly Chao (趙雅麗), had reportedly been covering up the company’s large losses from its shareholders.

An informed source said that given the size of CTS’ debt, Chao should have held a shareholder meeting last year and informed the company’s stockholders of its financial straits in accordance with regulations set forth in the Company Act (公司法).

Article 210 of the act stipulates that companies must call a shareholder meeting once their losses amount to half their capital.

However, Chao allegedly chose to conceal CTS’ financial data until very recently, the source said.

“Such an act is tantamount to dereliction of duty on her part,” the anonymous source said.

Additionally, an unidentified company source also accused Chao of malfeasance for a move designed to benefit the Innovative Center for Cultural and Creative Industries at Tamkang University in New Taipei City (新北市), where she had served as chief executive.

Chao allocated NT$600,000 to the center in the name of promoting “industry-academic cooperation,” the source said.

CTS convened a provisional meeting to select a new board of directors and supervisors on Tuesday, just three days before the Ministry of Culture was due to hold today’s review meeting for the appointment of PTS’ new governing body.

As the Board of Directors of PTS is entitled to head CTS, the timing of the provisional meeting has aroused speculation that Chao only called the assembly to safeguard her personal interests.

Prior to the meeting, the ministry was said to be vexed at Chao’s decision to advance the originally scheduled date of the meeting when it became aware of the rearrangement, sources said.

Sources also said Minister of Culture Lung Ying-tai (龍應台) allegedly expressed disapproval of such a move and said it would give the public a “negative impression.”

Despite the ministry’s alleged objections, the public broadcaster opened the meeting and selected a new governing body as planned.

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