Watchdog presses for details on Li's media ownership
PCCW chairman's role in broadcaster and newspaper may breach rules
The Broadcasting Authority yesterday ordered PCCW Media, operator of NOW TV, to provide information on chairman and controlling shareholder Richard Li Tzar-kai's involvement in the internet broadcaster and the Hong Kong Economic Journal to see if cross-media ownership rules have been breached.
The move comes after Mr Li failed in November to sell his 23 per cent stake in PCCW, which controls PCCW Media, to a consortium led by former investment banker Francis Leung Pak-to.
A source close to the government said PCCW had previously not replied to a government request for information to clarify relations between PCCW and the Journal after Mr Li's deal with the newspaper was announced.
As the controlling shareholder of PCCW, Mr Li is not allowed to own a newspaper or other media assets unless he is given a waiver by the chief executive. When he took a 50 per cent stake in the Economic Journal in August last year it raised public concern that he was breaching the rules.
The Broadcasting Authority said in a statement yesterday: 'Following the vote by the minority shareholders of Pacific Century Regional Developments Limited (PCRD) on November 30, 2006 against the proposed sale of approximately 23 per cent of shares in PCCW by PCRD to Fiorlatte and Mr Francis Leung Pak-to, the authority has been pursuing inquiries with PCCW Media in relation to Mr Richard Li Tzar-kai's involvement in PCCW Media, through the holding company PCCW, and a local newspaper [the Journal].'
The authority said it was acting under a section of the Broadcasting Ordinance.
PCCW declined to comment on the issue last night and Mr Li could not be reached. However, a source quoted Mr Li as saying he 'would be likely to provide the information when he receives the request'.
Chan King-cheung, chief editor of the Economic Journal, said: 'This is an issue that Mr Li himself needs to deal with. The government is just following its legal procedure. The editorial direction of the newspaper hasn't changed.'
The Legislative Council's information and technology panel meets next week to discuss the issue of Mr Li's cross-media ownership.
Democratic Party legislator Sin Chung-kai, a member of the panel, said: 'I think the government wants more information so it can answer the inquiries from the lawmakers.'
There has been much public debate about Mr Li's control of two media operations, with lawmakers complaining that Mr Li is clearly in breach of the Broadcasting Ordinance.
However, Mr Li has said that the Journal stake was bought through a trust called Clermont Media, in which he is a settlor and only funds the trust.
He claims that as he is not a financial beneficiary of the trust he should not be regarded as a shareholder of the newspaper.
A source close to the trust said Mr Li was not involved in the operation of Clermont Media, which is run by a set of trustees.
'If the Economic Journal distributes any dividends to the trust, the trustees will distribute the money to charity,' the source added.
The other 50 per cent stake in the Economic Journal is held by Lam Shan-muk, the founder of the newspaper, and his wife, Lam Lok Yau-mui.
After Mr Li bought the stake, the trust company appointed three directors to the board - Mr Li's business partner Morris Ho Kwok-fai as executive director, former TVB executive Robert Chan Hing-cheung and Wesley Chan.
