Tue, Nov 07, 2017 - Page 3 News List

NCC to probe proposed purchase of Eastern TV

QUESTIONABLE FUNDS:Mao Te only has NT$5.5 billion in capital, yet claims it can afford the NT$17.7 billion required for the purchase, a lawmaker said

By Shelley Shan  /  Staff reporter

The National Communications Commission (NCC) is to launch a review of Mao Te International Investment Co’s proposed acquisition of Eastern TV to determine its potential effects on national security and the industry, as well as Mao Te’s financial ability to make the purchase, NCC Chairwoman Nicole Chan (詹婷怡) said yesterday.

Eastern TV, the nation’s largest television network, operates eight cable channels. Its main shareholders include Eastern Media International, which holds 21.32 percent of the firm, and Washington-based Carlyle Group, which owns 65 percent.

Mao Te on Friday acquired Eastern Media’s shares and plans to buy Carlyle Group’s stake, Eastern Media said.

Several lawmakers, including New Power Party Legislator Hung Tzu-yung (洪慈庸) and Democratic Progressive Party (DPP) Legislator Chen Su-yueh (陳素月), have expressed concern over the deal.

Hung asked what criteria the commission would use to review the acquisition, particularly after media reported that Mao Te chairman Chang Kao-shiang (張高祥) had financially backed former Chinese Nationalist Party (KMT) chairwoman Hung Hsiu-chu (洪秀柱) in her incumbency bid earlier this year.

The commission should investigate the source of Mao Te’s funding for the purchase and whether any part came from China, Hung Tzu-yung said.

Meanwhile, Chen questioned how a company that has only NT$5.5 billion (US$182.1 million) in capital was able to afford a deal that costs about NT$17.7 billion.

Mao Te was established in August and has only four directors, including Chang, she said.

Viewers’ interests are at stake as the network owns eight channels, Chen said, adding that the commission should ensure that media outlets are not controlled by any single political party.

In response, Chan said that the deal has two parts:

First, Mao Te’s acquisition of Eastern Media’s shares does not involve a change of ownership, as it is only an equity transfer, she said, adding that the network would not need permission from the NCC for this part of the deal.

However, the part involving Carlyle Group requires special consideration, Chan said.

“Because Carlyle Group is a foreign investor, the sale of its stake in Eastern TV to a third party would need to be reviewed by the Ministry of Economic Affairs’ Investment Commission, which would seek input from the NCC, the Fair Trade Commission and other agencies,” Chan said.

In other developments, lawmakers criticized the commission for sending notices to cable service operators asking them to submit plans to charge cable subscribers based on various “a la carte” schemes.

The commission has yet to finalize the details of enforcing such schemes, but wants operators to start doing so, DPP Legislator Chung Chia-pin (鍾佳濱) said, adding that the commission should recall the notices.

The operators have been encouraged to start offering subscribers various channel-grouping options, Chan said, adding that they will not face punishment if they fail to do so.

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