ATV is seeking a judicial review to prevent the Communications Authority from releasing a final report on an investigation into a shareholder's alleged improper control over the broadcaster.
The free-to-air station took the action just before today's deadline for it to make a written response to a draft report in which the authority said major investor Wong Ching had breached an undertaking he made not to exercise de facto control over the day-to-day management and operations.
The authority launched the investigation after it received a complaint in June last year against the troubled station, which was later fined a record HK$300,000 for falsely reporting the death of ex-president Jiang Zemin in July.
According to ATV's application the authority also said in the draft report - content of which was revealed for the first time in the court documents - that ATV executive director James Shing Pan-yu was no longer a 'fit and proper person' to be a licensee. As quoted in the application, the report said Shing had allegedly 'allowed his responsibilities to be carried out and powers exercised by' Wong, who was said to be his personal consultant.
Shing had also doctored and withheld minutes of the weekly management meeting to 'conceal the true extent' of Wong's participation in the meetings, according to the report.
It found that ATV had failed to discharge its duty to adopt appropriate standards of corporate governance, according to the draft report cited in court papers. But the authority stopped short of concluding whether ATV was 'fit and proper' to hold a licence, according to the application filed on Tuesday and available for public inspection yesterday.
The authority was also said to have proposed a HK$1 million penalty on ATV and for Shing to cease his management within seven days of the release of the final report.
According to the papers, the authority suggested that Wong should not take play a managerial role and that the station should be required to hand in a proposal setting out in detail steps it would take to improve its corporate governance. Depending on the progress made by ATV, the authority would decide whether it should continue to be regarded as being fit to hold its licence.
ATV is challenging the authority's refusal to provide information and documents in relation to the investigation. It says it was denied a fair and reasonable opportunity to reply to the findings without access to the evidence provided by unidentified persons, including 'former ATV executives'. It says the authority said it refused to disclose the evidence because it was obtained on a strictly confidential basis.
ATV says the authority has been 'oppressive' in setting tight deadlines. It 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 on or before today and an oral reply on June 30.
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.
Professor Cheuk Pak-tong, director of Baptist University's Academy of Film, said frequent management changes had overshadowed ATV's development. Since its time as Rediffusion, the station had seen 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 TV 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.