Analysis
A PEACH OF A DEACON... OR,
DON'T PREACH TO A DEACON
Mr Deacon Chiu, Chairman of ATV Holdings Ltd, would never have got away with his recent actions in the US or London.
His supposed 3 'denials' in respect to the imminent sale of Asia Television Ltd (a subsidiary of ATV Holdings) turned out to be nothing but a smokescreen to cloud the true situation: Because there were negotiations taking place and they did result in 66 percent of ATV being sold.
These are the views of a number of analysts with whom TARGET has spoken. These analysts also expressed their 'disappointment' over Mr Deacon Chiu's denials, and some of them are of the belief that Mr Deacon Chiu owes an explanation to the public, or, at least, to the Office of The Commissioner for Securities for remarks he made during the weeks prior to the sale of the television station.
The Office of The Commissioner for Securities has now set up a Special Task Force to scrutinize 'every aspect' of the sale of Asia Television.
As Readers may remember, the Stock Market was rife with rumours of a take-over of ATV for more than a month before the actual signing of the Conditional Sale and Pur- chase Agreement on June 19, although Mr Deacon Chiu had repeatedly suggested that there were no negotiations under way as to the immediate sale.
The 3 denials took place on May 18, May 26, and June 8. In the last denial, Mr Deacon Chiu went so far as dismissing the rumour as 'totally inaccurate'.
The last rumour was that ATV Holdings had already entered into an agreement with a consortium for the sale of
ATV.
On June 19, ATV Holdings announced the sale of ATV, revealing that an agreement had been signed for the sale of the television station to a consortium for $HK613 million.
The consortium is owned in equal parts by the Lam Family (of Lai Sun Garment Fame), New World Develop- ment Company Ltd, and ATV Holdings Ltd.
In essence, ATV Holdings had agreed to give up 66.66 percent of the Issued Share Capital of ATV in exchange for $HK408 million, while retaining a one-third stake in the television company.
In retrospect, it would appear that Mr Deacon Chiu was not telling lies on June 8 when he denied that the sale of Asia Television had been reached.
However, according to some securities analysts, it would have been prudent for him to clarify the situation by effecting a suspension in the trading of ATV shares as soon as Day One of the negotiations got under way.
It would also have been prudent on the part of Chairman Chiu to issue a statement to the effect that negotiations for the sale of ATV were in progress and that they might result in the disposal, in full or in part, of the publicly-listed company's only major asset.
Mr Marc Faber, Vice President of Drexel Burnham Lambert (HK) Ltd, a foreign brokerage house in Hongkong, told TARGET: 'I think Mr Deacon Chiu was most unethical in making the denials. I am sure the negotiation for the sale of ATV had already been in progress when he made the denials.
'In the US or in London, a company spokesman will never utter such statements... he would either confirm the rumour or simply say "no comment" when he doesn't feel like responding to any inquiry.
'He (Mr Deacon Chiu) should have requested the sus- pension of trading in the shares of ATV a long time ago when the negotiations had just begun.' [Editor's Note: In the absence of a suspension in the trading of the company' shares, the scrip of ATV Holdings rose from about $HK1.20 on May 17 to $HK2.40 by June 20. Trading in the shares was finally suspended the next trading day.]
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