examination of the legal position indicates that it is conceivable that a foreign interest in a takeover bid could structure its bid in such a manner that the relevant provisions of the Television Ordinance would be fully complied with. In a takeover attempt, the proposal may not contemplate a transfer of the licence,
licence, but if that were the intention, the approval of the Governor in Council would be required under section 11A(3) for the licence to be assigned to another company. If a foreign interest chose to retain the existing Licensee, it would not be required to make an application to the Governor in Council unless a disqualified person is introduced to exercise control of that Licensee as required by Section 11A(1)(b).
Legal Advice
8
Very preliminary legal advice has been obtained from the Attorney General's Chambers on general issues associated with takeovers of the television stations in Hong Kong by foreign interests.
9
The Attorney General's Chambers advises that as far as section 10 is concerned, assuming that the business of a Licensee will be carried on as previously, section 10(a) will have probably no application. Section 10(b)-(e) will probably have some application if control of the licensee is to change hands, but it would not be difficult for the interests which are making the takeover offer to ensure that the qualifcations of the directors and principal officers of the Licensee are adequate for the purposes of these subsections.
10
Section 10(E) needs to be closely examined, having in mind the definition of "exercise control of a company" in section 2. Under this section two conditions exist whereby a person may be disqualified. The first would include persons holding office in the Licensee and this reference would apply to new officers, if any, appointed to the Licensee once the takeover has been effected. The second would include new shareholders who may acquire more than 15
per cent of the
the beneficial ownership of the Licensee.
11
The provisions of sections 10(g), (h), and (i) refer to provisions in a Licensee's Memorandum and Articles of Assocation and it is assumed that a foreign interest contemplating a takeover would ensure that those provisions were not altered to such an extent that they would contravene these provisions.