Stakeholders in troubled ATV fight over shares
The dispute between the two big stakeholders in troubled terrestrial broadcaster ATV - whose chairman suddenly resigned recently - has escalated to a new level.
Taiwanese billionaire Tsai Eng-meng, who bought into ATV at the beginning of this year, is unhappy with the family of Payson Cha Mou-sing, ATV's dominant stakeholder, according to a person familiar with the dispute. Tsai says the family did not transfer shares promised him by contract, and fears they will issue fresh convertible bonds next week to dilute his stake.
The person said that if the Cha family did not comply with the contract, Tsai's camp might take legal action against him.
But ATV non-executive director Chan Wing-kee, who together with Phoenix TV chairman Liu Changle and mainland conglomerate Citic Group owns the remaining shares, claimed that reports on allegations from Tsai's camp against Cha were one-sided and unfair to Cha.
The disputes came to light after Linus Cheung Wing-lam became the second senior management figure to step down in the past 12 months, resigning as ATV's chairman and director on Monday, only a year after he came on board.
Currently, Antenna Investment is the major shareholder in ATV, owning 47.58 per cent of its shares. Antenna is co-owned by Tsai's camp and Cha's family, with Cha's family owning 51 per cent of the A shares, which have voting rights; Tsai owns the rest of them and all the B shares.
Cha's family also owns 10.75 per cent of ATV's shares through Panfair.
The person familiar with the dispute said that when Tsai agreed to invest in ATV, which was experiencing great financial difficulties, Cha's family agreed in a contract to transfer 2.75 per cent of the shares from Panfair to Antenna, making Antenna the controlling shareholder in ATV, and also agreed to transfer two per cent of the voting shares from Antenna to Tsai.
No expiry date or deadline was stated in the contract, and 'the transferal can be done any time upon request,' the person said, but when Tsai's camp asked Cha for the transferal of these shares, Cha's family ignored Tsai's requests.
This person said that Tsai was extremely unhappy, especially since he had already spent HK$200 million on ATV through previously issued convertible bonds. The person said that four rounds of convertible bonds - bonds that can be converted into shares - had been issued since the beginning of this year.
However, another person familiar with the situation said that ATV's board had endorsed the proposal of issuing convertible bonds at a meeting last month and none of the directors present, including two from Want Want Group, the Taiwanese snack-food company which Tsai founded, raised objections.
The first person said that Tsai felt helpless when other stakeholders took the side of Cha's family.
When asked if he had taken sides, Chan said that he was only a minority shareholder, but felt that reports on the disputes had been unfair.
'Mr Cha has not made any responses to these reports so far, as he is a low-profile person,' said Chan, who is also a member of the Standing Committee of the Chinese People's Political Consultative Conference.
He hoped that Cha's family and Tsai could reconcile.
The Post attempted to contact the Cha family through the Mingly Corporation, of which he is chairman, and which holds important interests on the mainland. No comments were received yesterday.
Samson Tam Wai-ho, chairman of the Legislative Council's information technology and broadcasting panel, said that ATV's management must prove to the public that they were able to maintain its service and uphold press freedom. Tam said that ATV's share disputes would be raised in a panel meeting.
A government spokesman said the government and the Broadcasting Authority would ensure ATV continued to comply with all regulatory requirements. He said that ATV was required under its licence to apply to the watchdog for any changes in its shareholding structures, but the watchdog had no power to interfere between shareholders.