Li Ruigang defends indirect investment in TVB, saying his company ‘followed the rules’
Li Ruigang, chairman and founder of China Media Capital (CMC), mainland China’s most influential media and entertainment investor, said the company had complied with Hong Kong’s laws and regulations in acquiring an indirect stake in Television Broadcasters, in keeping with its practise of playing by the rules when it enters new markets.
“We have to follow the rules and regulations in Hong Kong. We will let the regulators to examine the situation,” said Li, who is also vice-chairman of TVB.
Li, dubbed China’s Rupert Murdoch, was referring to his indirect investment in TVB, the city’s Hong Kong’s dominant free-to-air broadcaster.
CMC is the single largest shareholder in TVB through its investment in Young Lion Holdings, which owns a 26 per cent stake. CMC became an indirect investor in TVB when it bought an undisclosed stake in Young Lion in April 2015.
Li’s holdings in TVB generated fresh discussion last month when the city’s stock market regulator, the Securities and Futures Commission flagged concern at CMC’s influence in TVB’s management, after the broadcaster disclosed its shareholding structure.
The regulator highlighted that CMC, which owns the majority of non voting shares in Young Lion, had great influence over the appointment of directors at the broadcaster, and could have sway in the broadcaster under the relationship agreement signed between Young Lion and CMC.
In response to the stock regulator’s concern, the Communications Authority, which is responsible for licensing and regulating the broadcasting and telecommunications industries in Hong Kong, had engaged a Queen’s Counsel to examine the relevant licence conditions and the statutory declarations and deeds of undertaking submitted by TVB and the relevant parties.
Speaking after the annual general meeting of TVB on Thursday, Li told reporters that the technical shareholder structure of CMC in TVB was “not his invention”.
“We were invited by [chairman Charles] Chan to invest in TVB... The agreements we signed with TVB and the co-operation method we adopted were just inherited from the previous investor,” said Li.
The SFC raised concerns over the shareholder structure after the broadcaster proposed a buyback offer to shareholders.
In January, TVB offered to repurchase 31.5 per cent of its shares for HK$4.21 billion (US$541 million).
Young Lion has indicated it will not take up the buy-back offer, which would see the stake in TVB held by the group and its affiliates rise to 41.19 per cent. As a result, a mandatory general offer will be triggered by Young Lion under the city’s takeovers code.