The National Communications Commission (NCC) has yet to receive an application from Los Angeles-based DMG Entertainment to acquire Eastern Broadcasting Co (EBC, 東森電視), but yesterday said it would review the acquisition based on the nation’s media regulations.
The proposed purchase became the focus of attention at yesterday’s meeting of the legislature’s Transportation Committee, after the Los Angeles Times reported that DMG chief executive Dan Mintz had signed an agreement to buy EBC from the Carlyle Group for US$600 million.
Lawmakers said they were worried about side effects of the deal, given DMG Entertainment’s connections with China.
Photo: Lo Pei-der, Taipei Times
DMG Entertainment belongs to the Dynamic Marketing Group, which was cofounded by Mintz and Chinese entrepreneurs Peter Xiao (肖文閣) and Wu Bing (吳冰), who are chairman and president respectively of the Beijing-based group.
Xiao’s father, Xiao Jinguang (肖勁光), was one of the 10 senior commanders of the Chinese People’s Liberation Army, served as Chinese deputy secretary of defense from 1954 to 1982 and vice chairman of the Fifth National People’s Congress Standing Committee from 1979 to 1983.
Democratic Progressive Party (DPP) Legislator Lee Kun-tse (李昆澤) said that even though Mintz had said that he was buying the TV network by himself and would not let his ties to China affect his investment in Taiwan, DMG Entertainment’s affiliation with China might still influence the network’s content.
DPP Legislator Kuan Bi-ling (管碧玲) said DMG Entertainment had its lawyers visit NCC Secretary-General Jason Ho (何吉森).
“You [NCC] apparently taught them well, because they have found a smart way to buy EBC, which is through a US citizen,” Kuan said.
The commission cannot simply review an acquisition based on the application documents, she said, adding that she would not agree to foreign investors or individuals affiliated with China buying EBC.
NCC Department of Broadcasting and Content Director Andy Hsieh (謝煥乾) said DMG Entertainment’s attorneys had asked the commission more than a month ago about the procedures foreign investors should follow if they wanted to buy a television network.
Hsieh said Mintz was making a statement about his connections with China, but the commission would review the acquisition based on the law.
NCC spokesperson Yu Hsiao-cheng (虞孝成) said that the Ministry of Economic Affairs does not include broadcast media as an industry in which Chinese investment is allowed.
The ministry’s Investment Commission would scrutinize the source of DMG Entertainment’s funding for the deal and whether the deal would change EBC’s shareholding structure, Yu said.
DPP spokesperson Cheng Yun-peng (鄭運鵬) said the Investment Commission and NCC have to protect freedom of speech and media freedoms by cautiously reviewing the case, and they must block Chinese investment in the nation’s media outlets, Cheng said.
The Satellite Broadcasting Act (衛星廣播電視法) caps direct investment from overseas investors at 50 percent, but the Los Angeles Times reported that DMG Entertainment would own 61 percent of EBC’s shares if the deal goes through.
The NCC must investigate if DMG Entertainment’s purchase would contravene the act, Cheng said, adding that the deal would also need to be approved by the Fair Trade Commission if it involved a merger of the two companies.
The Legislative Yuan should consider adding safeguard clauses to the Satellite Broadcasting Act, the Radio and Television Act (廣播電視法) and the Cable Television Act (有線廣播電視法) to prevent China from controlling Taiwan’s broadcast media.
Carlyle, a Washington-based private equity firm, is EBC’s largest shareholder, with a more than 60 percent stake in the company, while Eastern Media International Co (東森國際) holds a 22 percent stake.
Carlyle has been selling its Taiwanese investments since August, including Ta Chong Commercial Bank (大眾銀行), Natural Beauty Bio-Technology Co (自然美生物科技股份有限公司) and multiple service operator Kbro Co (凱擘).
Mintz told the Los Angeles Times that he has been eying the investment for some time, as EBC is the “largest privately owned Mandarin-speaking television network in the world,” and that it would be a great platform for DMG Entertainment.
Mintz said that the deal would work, because he is not Chinese.
Investment Commission executive secretary Emile Chang (張銘斌) said it would strictly review Mintz’s application and the source of his funding for the EBC deal.
He said it would also forward the application to the ministries of foreign affairs and national defense and the National Security Bureau for review.
“The review process might take more than three months,” Chang said.
Additional reporting by Lauly Li
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