Fri, Sep 25, 2015 - Page 4 News List

NCC mulls public hearings on CNS

MEDIA CONTROL:Lawmakers voiced concern over the government’s ability to monitor funding sources to ensure that they do not include Chinese investment

By Shelley Shan  /  Staff reporter

The National Communications Commission (NCC) would consider holding public hearings on Far EasTone Telecommunication’s planned acquisition of China Network Systems (CNS), commission Chairman Howard Shyr (石世豪) said yesterday, as lawmakers voiced concern over Chinese investment in local media firms.

The commission would not review the deal this month, said Shyr, who, along with a representative from the Fair Trade Commission, said FET had been asked to submit additional information on the deal.

Shyr said that private equity fund NHPEA Chrome Holding B.V of the Netherlands submitted an application on July 31 to acquire CNS. FET is to subscribe to bonds issued by NHPEA to acquire a major stake in CNS.

Information from the Investment Commission provided details on the funding for the acquisition, with NT$3.31 billion (US$99.5 million) from NHPEA and NT$2.2 billion from Taiwanese firm Kuang Hsin Wu. Its information also showed that investors are in the process of securing loans from multiple banks topping NT$51.8 billion.

Several lawmakers questioned the deal, saying the investors have skilfully circumvented media regulations banning direct investment by the government, political parties and the military as well as the Statute for Investment By Foreign Nationals (外國人投資條例).

Chinese Nationalist Party (KMT) Legislator Lo Shu-lei (羅淑蕾) said that FET, a publicly traded firm that counts four major government funds among its investors, is trying to skirt the ban on government investment by buying corporate bonds issued by NHPEA.

She said the deal would not only allow FET to own CNS’ cable TV system, but also to control the channels which CNS represents to negotiate with other cable system operators.

“When Want Want China Times wanted to acquire CNS, no television station dared report about the deal fearing that their channels would be removed from its channel lineup. The same thing might happen again; these channels would not report any negative news coverage of the Far Eastern Group, which includes FET,” she said.

Democratic Progressive Party (DPP) Legislator Yeh Yi-jin (葉宜津) said that 60 percent of CNS’ shares is owned by NHPEA and 40 percent by Kuang Hsin Wu.

However, the government does not seem to know that Kuang Hsin Wu is headed by a board member of Hon Hai Precision Co, casting doubts on its ability to monitor and review the deal.

“If the commission approves this ideal, that means Chinese investors could funnel funds [into Taiwanese companies] using this method,” she said.

DPP legislators Lee Kun-tse (李昆澤) and Kuan Bi-ling (管碧玲) urged the NCC not to rush into making a decision and to hold public hearings on the deal.

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