Fox Networks sues Bangkok Bank for unpaid US$21m guarantee after closure of Thai TV operator
TV and cable operator Fox Networks Group Asia is suing Thailand’s Bangkok Bank Public Company Ltd in Hong Kong for failing to honour a bank guarantee covering a defunct Thai pay-TV operator’s licensing payments.
The lawsuit, filed on Monday with the High Court of the Hong Kong Special Administrative Region Court, will see Fox Networks Group Asia fight to claim about US$21.3 million that it said it is owed after Thai pay-TV operator CTH Public Company Limited failed to pay licensing fees following its closure on September 1, 2016, according to a writ of summons seen by the Post.
CTH is listed as the first defendant, and Bangkok Bank as the second defendant in the legal suit filed by Fox Networks.
“We have filed a case in Hong Kong as ... Fox Networks Group Asia is based in Hong Kong and it is an international contract [signed with CTH],” said Zubin Gandevia, president for Fox Networks Group in Asia-Pacific and the Middle East.
Bangkok Bank in March 2013 issued an “unconditional” bank guarantee for CTH’s payment obligations towards a five-year licensing agreement, in which Fox Networks would provide 23 channels and other services such as subtitles and dubbing to CTH, according to Fox Networks.
Gandevia said that Bangkok Bank has not honoured the “unconditional” bank guarantee after the shuttering of CTH, and claimed that multiple letters issued to the bank had gone unanswered with no response in “any meaningful way”.
“Bangkok Bank, which gave us this unconditional guarantee for [CTH] is refusing to honour it ... they are refusing to even engage in any dialogue with us,” said Gandevia, who added that Fox Networks has sent letters to Bangkok Bank every month but failed to receive any response.
“It’s shocking that any bank, let alone a big bank like Bangkok Bank, would behave like this because it undermines the very basis on which the banking system works,” he said. “If you can’t service your bank guarantee, then what faith does anybody have in any banking instrument?”
Emails sent to Bangkok Bank went unanswered as of press time. While an investor relations representative for the bank confirmed that it had received questions from the Post, she declined to comment on when the bank would respond.
Fox Networks has also filed a separatelegal case against Bangkok Bank and another Thai pay-TV operator GMM Grammy Public Company Limited in Thailand for a breach of licensing agreement and guarantee. It is seeking over US$6 million in past due fees from GMM Grammy, which also failed to pay its license fees, Fox said.
In this case, Fox Networks said that Bangkok Bank also failed to pay the bank guarantee covering the GMM Grammy contract signed in March 2013. Fox Networks provided GMM Grammy with 26 channels and services, it said.
Fox Networks said that Bangkok Bank is Thailand’s largest guarantor for digital television operators, providing bank guarantees totalling over US$600 million for the industry.
“Forty per cent of digital television operators are guaranteed by Bangkok Bank,” said Gandevia. “Our fear is that this could trigger a collapse in this sector [in Thailand]. If they are not paying us, will they default on the other bank guarantees? What will this do to the whole industry?”
In April, Thai broadcasting regulator National Broadcasting and Telecommunications Commission (NBTC) sued Bangkok Bank for failing to pay 1.78 billion baht as the guarantor of digital television operator Thai TV Co, after Thai TV defaulted on its second batch of digital television auction fee payments.