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CONFIDENTIAL
CONFIDENTIAL
FM HONG KONG 170855Z FEB 81
TO PRIORITY CANBERRA
TELEGRAM NUMBER 3 OF 17 FEBRUARY
HKK
30711 TOP COP!
RECEIVED IN
18 FFR
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YOU MAY HAVE SEEN THE ANNOUNCEMENT ON 16 FEBRUARY OF AN OFFER BY A CONSORTIUM OF THREE AUSTRALIAN COMPANIES TO BUY A 60% HOLDING
IN REDIFFUSION TELEVISION HONG KONG (RTV). THERE ARE NOW TWO COMMERCIAL TELEVISION COMPANIES IN HONG KONG, EACH PROVIDING ONE ENGLISH AND ONE CHINESE SERVICE. RTV HAS BEEN MAKING A LOSS FOR SEVERAL YEARS, AND THE BRITISH PARENT COMPANY (REDIFFUSION) WANTS TO REDUCE ITS HOLDING. LOCAL SHAREHOLDERS AND INTERESTS WERE RELUCTANT TO GET FURTHER INVOLVED. THE TEXT OF REDIFFUSION'S ANNOUNCEMENT IS AT THE END OF THIS TELEGRAM.
THE THREE AUSTRALIAN COMPANIES ARE ALL. FROM VICTORIA: DAVID SYME AND CO. LTD., HENRY JONES (IXL) LTD. AND CRA LTD. DAVID SYME HAS A HONG KONG SUBSIDIARY, SYME MEDIA ENTERPRISES, AND IS LOOKING TO EXPAND ITS INTERESTS IN THIS PART OF ASIA. IN AUSTRALIA IT PUBLISHES THE MELBOURNE AGE, AND HAS OTHER COMMUNICATIONS INTERESTS. HENRY JONES OWNS A REGIONAL TV STATION AT GRIFFITH (N.S.W.) AND THREE RADIO STATIONS - GRIFFITH, HOBART AND LAUNCESTON. CRA LTD. IS PRINCIPALLY ENGAGED IN MINING AND RESOURCE INDUSTRIES. OTHER INFORMATION WE HAVE HERE IS BASED ON WHAT THESE COMPANIES HAVE TOLD
US.
THE PROPOSAL TO TRANSFER THE SHARES REQUIRES BY LAW THE CONSENT OF THE GOVERNOR-IN-COUNCIL. HE MUST BE SATISFIED THAT THE CHANGE IS IN THE PUBLIC INTEREST. IT IS THEREFORE NECESSARY FOR THIS GOVERNMENT TO MAKE A DETAILED ASSESSMENT OF THE INTEGRITY AND PROFESSIONAL EXPERTISE OF THE PROPOSED NEW SHAREHOLDERS, AND ALSO THEIR WILLINGNESS AND ABILITY TO PROVIDE FURTHER FUNDS FOR THE RELOCATION OF THE STATION'S PRINCIPAL BUILDING AND TO ACCEPT THAT THERE IS UNLIKELY TO BE MUCH IMPROVEMENT OVER THE PRESENT LOSS-MAKING
SITUATION IN THE NEAR TERM.
ON THE POLITICAL SIDE, HONG KONG'S POSITION REQUIRES SPECIAL CONSIDERATION OF THE BACKGROUND AND ATTITUDES OF THE COMPANIES AND THE LEADING FIGURES IN THEM. WE ARE SOUNDING OUT THE AUSTRAL I AN COMMISSION HERE, BUT WE WOULD IN ADDITION BE VERY GRATEFUL FOR ANY INFORMATION OR GUIDANCE YOU COULD PROVIDE. AN EARLY DECISION IS IN EVERYONE'S INTEREST AND IT WOULD HELP IF YOU COULD REPLY BY TELEGRAM.
FLIGHTS PERMITTING, A SMALL GOVERNMENT TEAM MAY TRAVEL SOON TO VICTORIA TO DISCUSS THE PROPOSALS AT FIRST HAND WITH THE PRINCIPALS
OF THE CONSORTIUM. THE PARTY WOULD WISH TO VISIT SOME OF THEIR MEDIA
CONFIDENTIAL
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