China Mobile launches investigation into HKTV deal

China Mobile says agreement might have violated mainland rules, but Ricky Wong's company insists the sale is 'concluded'

PUBLISHED : Monday, 06 January, 2014, 4:02am
UPDATED : Monday, 06 January, 2014, 11:12am

China Mobile has launched an investigation into its Hong Kong subsidiary's mobile television deal with Ricky Wong Wai-kay's Hong Kong Television Network, saying it might violate mainland rules.

But HKTV said its agreement with China Mobile Hong Kong Corporation had "concluded".

And a China analyst said any inquiry by the parent company was unlikely to result in a reversal of the deal.

State-owned China Mobile made the announcement on its website last night, saying it would launch an internal probe into its Hong Kong unit's equity transaction with "a certain Hong Kong TV network company".

But it was not disclosed to the Hong Kong Exchanges and Clearing, where China Mobile is listed.

The HK$142 million acquisition of China Mobile Hong Kong - the only operator specifically assigned with spectrum to provide mobile television services - was announced late last month.

It came almost three months after Wong's hopes of launching a free-to-air service were dashed when the government denied him a licence.

Last night's statement said: "Regarding the share transaction between China Mobile Hong Kong Corporation and a certain television network company in Hong Kong, China Mobile Communications Corporation has decided to launch an internal investigation.

"The content of the investigation includes whether the transaction complies with the relevant regulations of the State-owned Assets Supervision and Administration Commission of the State Council as well as the internal management system of the company."

China watcher Johnny Lau Yui-siu said the "unusual" move by the operator showed Beijing's contradictory approach to Hong Kong-related matters, "underlining the conservatives' disapproval of the sale".

He added: "But if a final legal agreement has been entered into, it would be impossible for the parent company to nullify it with administrative measures."

A China Mobile Hong Kong Corporation spokeswoman would not comment.

A spokeswoman for HKTV said "the transaction is concluded" and the station would not comment on other companies' internal matters.

Last week Hong Kong's Communications Authority said it would not investigate the deal as "the acquisition does not give rise to a concern that it may have, or is likely to have, the effect of substantially lessening competition in the relevant telecommunications markets". Its spokeswoman said last night there was no change to the decision.

Wong has already announced plans to launch three to five internet channels, similar to services offered by Netflix, Hulu and WhereverTV.

Professor Anthony Fung Ying-him, director of Chinese University's school of journalism and communication, said China Mobile's statement was unusual. "It's impossible that the parent company was not aware of the deal its subsidiary made. The announcement perhaps indicates that there's differing opinions [internally] about the decision."