9
The corporate structure also enables HK-TVB Ltd. to bypass Section 40(1)(b) of the Television Ordinance which stipulates that the licensee must keep Government informed of beneficial ownership of its shares. Prior to the creation of HK-TVB Ltd., the licensee, TVB Ltd., as required by Section 40(1)(b), had kept
kept Government informed of the beneficial owners of all its shares. This requirement has been rendered ineffective by the creation of HK-TVB Ltd. and Government now has no record of the beneficial ownership of the shares HK-TVB Ltd.
10
in
from the current related to Bond When considering HK-TVB Ltd. (the
A further complication arising corporate structure of HK-TVB Ltd. is Corporation International Limited (BCIL). the legal position of BCIL's interest in holding company), it became
became clear that Government had ΠΟ power to prevent BCIL Or any other foreign company from acquiring even up
to 100% of the shares in HK-TV8 Ltd. Indeed, BCIL had earlier informed the Government of its intention to do precisely that, although, they have to date only acquired about 29% of the shares in HK-TVB Ltd.
11
The BA has therefore concluded that effective regulation of the television industry has been compromised by the corporate structure of the existing two licensee companies. It therefore recommends
recommends that a
that a licensee company shall not be held in any form by a holding company, and shall not hold subsidiary companies which conduct businesses not directly associated or connected with television broadcasting.
-
Foreign Ownership (Recommendations (d) (h))
12
The BRB did not make any recommendation on foreign ownership in a television licensee company, probably because both licensee companies were firmly controlled by local interests then and the Ordinance already contains a provision limiting foreign ownership to 49% (Section 11(1)(b) of the Television Ordinance).
13
It can be argued that it has always been Government policy
to place restrictions on foreign ownership in television licensee companies. In 1967, one of the ma in factors in favour of awarding a licence to TVB Ltd. in preference to other tenderers was that more than 50%
than 50% of the shareholding of TVB Ltd. was held by local people.
When RTV, the predecessor of ATV, was granted a licence in 1973, it was required to increase its local ownership to 51% within four years, although this requirement was not fulfilled until Mr. Deacon Chiu bought out the Australian consortium in 1984 and renamed RTV as ATV.
CONFIDENTIAL