Richard Keady, Partner                                 Amita Kaur, Managing Associate
Head of Asia Dispute Resolution Group      Asia Dispute Resolution Group

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  1. BACKGROUND
  2. RECOMMENDATION BY THE CA
  3. NON-PAYMENT OF LICENCE FEES
  4. TWELVE MONTH NOTICE PERIOD
  5. RECENT DEVELOPMENTS

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BACKGROUND

As reported by the press over the last few months, Hong Kong’s longest standing TV station, Asia Television Limited (“ATV”) has been plagued with financial woes and licensing problems. Apart from repeatedly defaulting on payments of employees’ wages, ATV has also defaulted on its carrier licence fee and fee for domestic free television programme service licence (“the Licence”). At the heart of ATV’s problems is a dispute among shareholders, as well as criticism of mismanagement of the station, which led the Communications Authority (“CA”) to advise the Chief Executive in Council (“CEC”) against renewing ATV’s free-to-air licence on 4 November 2014.

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RECOMMENDATION BY THE CA

The regulation of broadcasting in Hong Kong is governed by the Broadcasting Ordinance (“BO”) and supervised by the CA. Most importantly, the BO contains restrictions on who may own and direct a broadcasting company.

The initial indication of problems came about when the CA investigated complaints on ATV’s incorrect reporting of the death of Jiang Zemin. As a result, ATV was fined of HK$300,000. The CA further imposed a HK$1 million fine on ATV after its investigations revealed that Mr. Wong Ching (ATV’s ultimate majority shareholder at that time and mainland property tycoon) was in control over ATV, in violation of the BO.

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NON-PAYMENT OF LICENCE FEES

ATV has also failed to pay the Licence fees resulting in the CA imposing a penalty of HK$200,000 on ATV. The CA has directed ATV to settle the outstanding licence fees and interests in two instalments warning that failure by ATV to comply with this would lead to the CA imposing further sanctions on ATV.

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TWELVE MONTH NOTICE PERIOD

The BO stipulates that where the CEC decides not to extend or renew a TV licence, he shall notify the licensee at least 12 months before the expiry of the validity of the licence. Given that ATV’s Licence will expire on 30 November this year, the CA has indicated that that the BO makes provisions for the CEC to extend the term of a licence where it is necessary for the purpose of complying with the 12 month notice requirement.

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RECENT DEVELOPMENTS

Just prior to Chinese New Year, ATV managed to raise funds through the sale of some agricultural land as well as the copyright of 29 soap operas. ATV confirmed that all outstanding employee wages for December and January have now been paid. Furthermore, the CA has confirmed that it has received cheques from ATV in settlement of its outstanding Licence fees and interests.

At the time of writing, there has been no announcement by the CEC on the renewal of ATV’s Licence.


 

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