**********************************************************
The Government today (June 27) announced that the Chief Executive in Council had approved Mr George Chan Ching-cheong and Mr Jackey Chan Shek-nin, who were disqualified persons under the Broadcasting Ordinance, to exercise control of Television Broadcasts Limited (TVB) and TVB Pay Vision Limited (TVB Pay Vision).
Mr George Chan was approved to exercise control of TVB as the Assistant Managing Director, and to exercise control of TVB Pay Vision as the Director. The approval took effect from January 8, 2007, and January 19, 2007, when the two companies submitted their applications respectively. Mr Jackey Chan was approved to exercise control of TVB Pay Vision as the Chief Operating Officer between January 19, 2007, and April 30, 2007, before he had resigned from TVB Pay Vision. The Chief Executive in Council decided that no retrospective approval should be granted for the two disqualified persons to exercise control of the two companies during the period from November 12, 2004, to January, 2007.
The disqualified person issue arises from the familial relationship among Mr Jackey Chan, Mr George Chan and Mr Robert Chan Hing-cheong employed in different media businesses. Mr Jackey Chan was a principal officer of TVB Pay Vision from February 23, 2004, to April 30, 2007. Mr George Chan is a principal officer of TVB since November 12, 2004, and a director of TVB Pay Vision since November 10, 2005. Mr Robert Chan is a director of Hong Kong Economic Journal Company Limited, which becomes the proprietor of the local newspaper, viz. the Hong Kong Economic Journal (HKEJ) from September 1, 2006 onwards.
A spokesman for Commerce, Industry and Technology Bureau said that when assessing the applications with regard to the impact on the overall media diversity in Hong Kong, the Administration noted that Mr George Chan was not responsible for programming in TVB and Mr Robert Chan did not hold any editorial position in HKEJ. Mr George Chan also submitted undertakings to the Government stating that he would act independently from any of his relatives in the media industry. The risk of editorial uniformity and media concentration would be minimal.
On the other hand, given the extensive experience of Mr George Chan in the media and telecommunications fields, the approval would bring slight positive effect on the development of the broadcasting industry and the economy of Hong Kong.
"We should maintain a business environment conducive to the development of the media industry and allow broadcasting licensees and newspaper proprietors flexibility to employ their senior management with the best ability and credentials, so long as this does not compromise cross-media control," the spokesman said.
Concerning the possible competition effect on the relevant television programme service markets, the Government had imposed a set of "firewall provisions" since 2000 in the licences of TVB and TVB Pay Vision to keep the two companies at arm's length and to prevent cross-subsidisation and preferential treatment. These provisions limit the extent to which TVB can leverage its dominant position in the free television market in the pay television market through TVB Pay Vision. Concerning HKEJ, it did not have any presence in the existing local free or pay television markets in the form of, say, partnership with any existing domestic free or pay television licensees. The familial relationships of the three persons involved would unlikely have any effect on competition of the relevant television programme service markets.
Regarding the decision to reject the applications for retrospective approval, the spokesman said that the onus of complying with the disqualified persons provisions under the Ordinance rested with the licensees.
"TVB and TVB Pay Vision fail to disclose to the Broadcasting Authority or the Government that there have been disqualified persons exercising control of the two companies. Their inadvertence in overlooking the statutory restriction and the familial relationship among the persons involved cannot be an excuse for non-compliance. We therefore consider that the applications for retrospective approval should be rejected," the spokesman added.
The Broadcasting Authority will consider imposing appropriate regulatory sanction on the two companies in accordance with the ordinance and their domestic free and pay television programme service licences during the period of non-compliance.
Under the ordinance, unless approved by the Chief Executive in Council, a person shall not exercise control of a domestic free television programme service licensee or a domestic pay television programme service licensee if he is an associate (including a relative) of a person who is exercising control of certain media businesses which, among others, include a proprietor of a local newspaper as well as another broadcasting licensee (except in the case of a domestic pay television programme service licensee, a non-domestic television programme service licensee is not a disqualified person). These provisions aim to avoid media concentration and editorial uniformity across different media platforms. TVB is a domestic free television programme service licensee and TVB Pay Vision is a domestic pay television programme service licensee. The two companies are therefore subject to these cross-media control provisions.
The ordinance further provides that, in considering the public interest for approving a disqualified person application, the Chief Executive in Council shall take account of, but not limited to, the effect on competition in the relevant television programme service market; the extent to which viewers will be offered more diversified television programme choices; the impact on the development of the broadcasting industry; and the overall benefits to the economy.
Ends/Wednesday, June 27, 2007
Issued at HKT 18:06
NNNN