1979, a Director of Rediffusion (UK) which then held and still holds via Rediffusion (HK),its wholly owned subsidiary, over 80% of the shares in RTV, was asked whether the UK company's support of RTV was open- ended. The representative replied that it was not; but they were reasonably optimistic about RTV's future. He and the other RTV representatives present seemed to believe there was a fair chance of the company breaking even in 1980.
5
In June 1980, the Television Authority was informed orally
by the Managing Director of RTV that his company was still losing money. He claimed that his principals in London had agreed to a further injection of capital later in the year, should it prove necessary. But he pointed out that they would like to find a number of new investors to share future risks in the company. In October 1980, the Managing Director of RTV again spoke to the Television Authority and informed him in "strictest confidence" that his company was in the process of drawing up proposals for increasing the share capital and restructuring the organisation. He said that if existing shareholders failed to take up all the required stock, then a number of other new shareholders would be approached and, subject to the approval of Government, would be offered shares in the restructured company. He said that RTV was confident that there were responsible persons available who would take up such an offer because the restructured company would be an attractive investment.
6
It is understood that existing shareholders showed no interest in increasing their investment in the company and that a number of potential new local shareholders were approached. None appeared interested, unless they could hold more than 50% of the shares; and no concrete offers were made. Rediffusion (UK) was apparently looking for at least three reliable companies or individuals which would share the risk with them. Between October 1980 and January 1981, the Secretary for Information and the Television Authority were informed from time to time of approaches made by or to a number of prominent Hong Kong individuals and companies. None matured.
The Australian proposal
7
The first substantive proposal submitted to Government was presented to the Secretary for Information on 14th February 1981 in the form of an aide-memoire submitted on behalf of three Australian companies which had reached agreement in principle with Rediffusion (UK) each to purchase 20.4% of the shares of RTV, to be held by a holding company registered in Hong Kong. A copy of the aide-memoire is attached at Annex B. The proposals in the aide-memoire were confirmed by a formal letter to Government dated 21st February from Messrs. Johnson, Stokes and Master acting on behalf of both RTV and Rediffusion (UK). A copy of this letter is attached at Annex C. The agreement in principle between the Australian companies and Rediffusion (UK) is contained in a document (copy attached at Annex D) which remains valid for 60 days from 14th February, that is until the 15th April. Rediffusion (UK) will hold its annual general meeting in England in May_/.
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