The Communications Authority has found ATV's executive director unfit to hold a broadcast licence and proposed fining the station a record HK$1 million for his actions, according to a draft reported detailed yesterday in court filings.
The report concluded that ATV executive director James Shing Pan-yu improperly ceded much of his day-to-day responsibilities at the free-to-air station to investor Wong Ching, who he passed off as a personal consultant.
It further found that Shing doctored and withheld minutes of the weekly management meeting to 'conceal the true extent' of Wong's participation in the meetings, helping to show that Shing was not a 'fit and proper person' to be a licensee, according to the filings.
Details of the preliminary report were revealed for the first time yesterday after ATV sought a judicial review to prevent the authority from releasing the final version of its findings.
The report, which stems from a complaint of mismanagement filed against the station last June, is the latest blow to the broadcaster, which was fined a record HK$300,000 in December for falsely reporting the death of ex-president Jiang Zemin.
In addition to its specific findings on Shing, the authority found that ATV had itself failed to discharge its duty to adopt appropriate standards of corporate governance. But the authority stopped short of concluding whether the station was unfit to hold a licence.
The authority also found that Wong, in assuming a managerial role at the station, had breached his own commitment to stay out of its day-to-day operations. The authority was said to have proposed a HK$1 million penalty for ATV and is seeking to have Shing removed from his management post within seven days of the report's release.
The station filed its court challenge on Tuesday, just ahead of today's deadline for a written response to the report. The documents were released for public inspection yesterday.
ATV is challenging the authority's refusal to provide information and documents supporting its investigation. The station says it was denied a fair opportunity to reply to the findings without access to the evidence provided by unidentified persons, including 'former ATV executives'.
The authority refused to disclose the evidence because it was obtained on a confidential basis, ATV said, and accused the regulator of setting 'oppressive' deadlines.
The station is asking the court to overturn the authority's decision to impose a deadline for it to provide a written reply to the draft report by today and an oral reply on Saturday.
A closed-door hearing was held yesterday, after which the case was adjourned until Wednesday. An order was made but the content was unknown and could not be reported.
The authority wants Wong excluded from a managerial role and requires the station to hand in a proposal detailing steps it would take to improve its corporate governance. Depending on ATV's progress, the authority would decide whether it should continue to be regarded as being fit to hold its licence.
Professor Cheuk Pak-tong, director of Baptist University's Academy of Film, said frequent management changes had hampered ATV's development. Since its time as Rediffusion, the station had had eight or nine major investors come and go, he said. The instability triggered by managerial changes plagued the station, especially at a time when the government was considering giving out new free-to-air television licences.
'If the government gave out new licences and ATV went without a new leader, it would be a major crisis for the station,' Cheuk said.