6 Mar 07
The Thai government said on Tuesday it would seize ITV, the television station sold by ousted Prime Minister Thaksin Shinawatra to Singapore’s Temasek Holdings, and halt its operations temporarily.
“The ITV station will be shut down from March 7 until there is clarity on legal issues,” Dhipawadee Meksawan, a minister at Prime Minister’s Office, told a news conference attended by ITV reporters.
Some of them wept after the announcement.
The run-up to the seizure of ITV and the fate of its 1,010 employees had been front page news for weeks in Thailand since it lost a protracted legal battle against the government.
The firm admitted it had no hope of meeting Tuesday’s deadline to pay 100 billion baht ($2.8 billion) in fines and outstanding fees after losing a struggle against breach of contract charges.
Last week, the government said ITV, one of only two private television stations in Thailand, would fall under the control of state broadcaster MCOT, which operates Channel 9 television, radio stations and the Thai News Agency.
But in an abrupt policy U-turn, the government said on Tuesday it had decided to hand temporary control of ITV to the Public Relations Department, part of the Prime Minister’s Office.
“After reconsidering this issue, we think the Public Relations Department will be the right agency to manage ITV until we find a new operator,” Dhipawadee said.
The military-appointed government had also promised the station would continue to broadcast while its future was sorted out.
Apology to reporters
Prime Minister Surayud Chulanont apologized to a group of ITV reporters outside Government House for another change of mind.
“I would like to apologize. I always realize the importance of media. But there were legal issues and I have to stick to the law,” he said.
Dhipawadee said it would take a month for the government to decide the future of ITV, the country’s third most popular television station.
The seizure is another setback for Temasek’s troubled $3.8 billion acquisition last year of Thaksin’s telecoms group Shin Corp, which holds a 53-percent stake in ITV.
The government says it is negotiating to buy back Shin’s satellite unit, which coup leader General Sonthi Boonyaratglin has said he wants back as a matter of national security.
Tuesday’s controversial decision, the latest in a line including the imposition of capital controls and a tightening of foreign business ownership laws, has fueled fears of rising economic nationalism in post-coup Thailand.
“The push to nationalize ITV is an unfortunate precedent that has increased the risk of investing in Thailand,” Keith Neruda, head of research of UBS Securities in Bangkok.
ITV probably faced bankruptcy and delisting, although the financial impact on Shin Corp would be small because ITV represented less than one percent of Shin’s net asset value, analysts said.
ITV shares have been suspended from trading since last Tuesday, when the government announced the deadline.