Govt insists iTV settle unpaid fees this month

The government will not consider five proposals from the broadcaster iTV unless it pays the balance of unpaid concession fees totalling Bt2.21 billion by the end of this month.

Finance Minister MR Pridiyathorn Devakula said this yesterday after discussions with Prime Minister Surayud Chulanont on the five proposals from iTV. The minister said the premier also agreed that iTV has to pay the unpaid concession fees before the government would look at the proposals.

When asked what the government would do if iTV failed to pay the unpaid fees within the deadline, Pridiyathorn said he believes iTV has enough cash to pay.

On Wednesday the embattled broadcaster proposed five alternatives to deal with its concession-fee debt of Bt2.21 to a meeting involving iTV and the Office of the Permanent Secretary.

The proposals include repayment by iTV of Bt750 million in cash, plus Bt1.5 billion through issuing new shares, allowing the PM's Office to own 55.4 per cent of the broadcaster. This would clear its unpaid concession fees of Bt2.21 billion.

Others included the unloading by Shin Corp of all its 638 million shares in iTV to general investors, the acquisition of all iTV shares by the government, and iTV's payment of the unpaid concession fees of Bt1 billion first and paying the remainder in five-year instalments.

The final option is that the government revokes iTV's concession on the grounds that the broadcaster cannot finance the unpaid concession fees within the deadline.

Pridiyathorn said that he would not talk with iTV on its proposal to pay the concession fee on an instalment basis. He also rejected the proposal that the government should acquire all iTV shares.

"Why do we have to give money to it. It should be the other way round," he said.

The broadcaster has around Bt1.3 billion cash flow. It reported to the Stock Exchange of Thailand (SET) on Monday that it was considering either borrowing or increasing its capital to meet partial payment of concession fees amounting to Bt2.21 billion, which it owes the PM's Office for the 9th, 10th and 11th years of its deal.

However, the company is not able to undertake either of these within a short period, due to uncertainty over the penalty for adjusting its television programming, which creates a substantial risk that the company might have to file for bankruptcy, it said.

As of last month, iTV had to pay a total of Bt100.343 billion to its concession owner, of which Bt2.21 billion was for overdue concession fees, Bt464 million was interest and Bt97.76 billion was a fine for adjusting its programming content without the consent of the concession owner.

The dispute between iTV and the PM's Office began in September 2002, when the broadcaster appealed to an arbitration panel over its dispute with the PM's Office regarding the terms of its concession contract.

In January 2004, the arbitration panel allowed iTV to pay a lower concession fee and adjust the ratio of its news and entertainment programming by raising the entertainment content.

The PM's Office appealed to the Central Administrative Court, which last May overruled the arbitration panel's decision. The broadcaster later appealed to the Supreme Administrative Court, which last month upheld the ruling of the lower court.

As a result, the PM's Office is demanding immediate payment of the fine, plus backdated concession fees.

Piyanart Srivalo

Thailand News
The Nation Thailand
Friday January 26, 2007