The National Communications Commission (NCC) yesterday said it would review Taiwan Broadband Communications’ (TBC) initial public offering (IPO) in Singapore in May to determine if the company violated the Cable Radio and Television Act (有線廣播電視法).
TBC is the nation’s fifth-largest multiple cable system operator.
Media reports have said that the cable operator may be exploiting a loophole through the IPO to help attract funds from Chinese investors, which could undermine Taiwan’s national security.
NCC chief secretary Wong Po-tsung (翁柏宗) said the IPO should have been reviewed and approved by the commission before it was held, adding that it would ask TBC’s management to come answer questions from NCC commissioners.
The NCC said it became aware of the case after reading a story published in the Chinese-language Business Weekly at the end of April. It then lodged an inquiry with the Investment Commission asking for more information about the case.
“We discovered that TBC did not seek approval from the Investment Commission before launching its IPO, so we asked the Investment Commission to look into the matter,” NCC specialist Chan Yi-lien (詹懿廉) said.
Chan said the IPO was launched in Singapore under the name Asian Pay Television Trust using funding from Singapore-listed Macquarie International Infrastructure Fund and Macquarie Korea Opportunities Fund, which are run by the Macquarie Group. The trust owns 100 percent of TBC’s shares.
On May 22, the Investment Commission asked TBC about changes in the company’s investment structure and investors’ rights after the IPO was held. The Investment Commission did not receive a full answer from the operator until Aug. 1, according to the NCC. On Aug. 5, the Investment Commission turned over the company’s response to the communications agency.
Andy Hsieh (謝煥乾), director of the NCC’s communication management department, said the case would be reviewed for compliance with the Statute for Investment by Foreign Nationals (外國人投資條例) and the Cable Radio and Television Act.
“The statute requires investors to secure the approval of administrative authorities if they invest in businesses that allow restrictive investment from foreign investors,” Hsieh said.
He added that Article 23 of the act states that the central regulatory agency may reject applications from foreign investors planning to establish or operate cable radio or television services without the resolution of the review committee if it deems that the foreign investment would have an adverse effect on national security, public order, or society.
Hsieh said that his department is gathering information on the changes made to TBC shareholders’ rights and investment plans since 2006, adding that a final ruling would be issued by NCC commissioners.
TBC issued a statement that the trust had made it clear when it launched the offering that Chinese investors are banned from purchasing shares. The fund can ask Chinese investors to sell their stakes in the fund and can suspend the rights of these investors if they refuse to comply.