TNAG-1817-FCO40-2578-Broadcasting-in-Hong-Kong-1988 — Page 9

majority of the

directors of a licensee company should be ordinarily resident in and permanent residents of Hong Kong (recommendation (h)) is in line with Section 10(b) of the existing Television Ordinance and is therefore supported.

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The BA recommends that, in place of the current definition (footnote to paragraph 14), a

14), a local person should be defined as one who

one who is a holder of a a permanent Hong Kong identity card and is ordinarily resident in Hong Kong. Anyone who fails to meet either of these qualifications will be regarded as a "foreigner" for the purpose of the Television Ordinance. In case of companies, a local company is one controlled by people who are permanent residents of and ordinarily resident in Hong Kong. The definition proposed by the BA is supported.

Legislation in Other Countries

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Tight restrictions on foreign ownership and control of television stations are found in legislation in many overseas countries such as Australia, U.K., U.S.A., and New Zealand. (A summary of these restrictions is

attached at Annex F).

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An event which

is currently unfolding in London, illustrates the point. The BBC report on this

this is reproduced hereunder -

PRESENTER (BBC World Service, "News About Britain", 4.3.88):

The Independent Broadcasting Authority has warned the commercial breakfast time television company, TV-am, that it could

it could be closed down unless swift action is taken to reduce the shareholding in the company by Saudi Arabian interests.

The warning follows disclosures of the 15% stake in TV-am through a company controlled by a former Chairman, Mr. Timothy Aitken.

Shareholdings of more than 10% in independent television companies by interests outside the European Community are not allowed without I BA permission. The Authority, which regulates commercial television in Britain, says unless TV-am disposed of the shares within 60 days it would lose its licence.

Last week the Conservative Mr. Jonathan Aitken, who is Timothy Aitken's cousin, resigned as a Director of TV-am after the Saudi connection was revealed.

CONFIDENTIAL