TNAG-1734-FCO40-2447-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 230

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Examples of such provisions are the prohibition on nominee

shareholders, in section 10(g) of the Ordinance, the

prohibition on disqualified persons exercising control of

the company under section 10(f), the provision under section 11(1)(b) restricting foreign ownership to 49%) and,

under the same section, the prohibition on a licensee

acquiring a controlling interest in any company the

business of which is not directly connected or associated

with television broadcasting. As the holding companies

are not subject to the above prohibitions they may and, in fact, do have nominee shareholders, and are not legally

prevented from setting up or acquiring businesses

unrelated to broadcasting. It is thus evident that the

stated intention of the Ordinance, to ensure that

that the

licensee is essentially an independent company, has been

severely compromised by events since the amendments were

made to the Ordinance in 1973.

9

Royalty

Sir,

On the question of royalty, the Bill incorporates a change in the method of the calculation of royalty

payable by licensee companies for their exclusive use of

the air-waves. Currently royalties are calculated on the

basis of profits.

profits. Since

Since air-waves are

community

property, the licensee should be required to pay for their use irrespective of whether a profit is made.

The proposals in the 3111

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