By Satawasin Staporncharnchai
BANGKOK, Dec 13 (Reuters) – Thai broadcaster ITV PCL , owned indirectly by Singapore’s Temasek Holdings, lost its final appeal in a licence fee dispute with the government on Wednesday, threatening it with bankruptcy.
The ruling by the Supreme Administrative Court, which sent ITV stock down to historic low, could force the firm pay as much as 94 billion baht ($2.7 billion) in fines and damages for breach of its licence fee agreement. (article19’s note: That’s US$2.7 billion or about S$4.1 billion!! Sheesh!!)
ITV shares, valued at $95 million on the Thai bourse, sank 26 percent to a historic low of 2.06 baht within minutes of the court announcing its verdict, but recovered to 2.24 baht by 0800 GMT, about an hour later.
The overall Thai stock market was down 0.2 percent.
“It is impossible for the broadcaster to pay out,” UOB KayHian analyst Kosin Sripaiboon said. “The next step would be for the Attorney-General to sue on the fine, but I honestly don’t think that that amount would be realistically payable.”
ITV appealed after the lower Central Administrative Court ruled in May in favour of the Prime Minister’s Office (PMO), the department which owns the concession licensed to the broadcaster.
The PMO had sued the broadcaster in 2004 to overrule an arbitration ruling which cut the company’s fee payments to 6.5 percent of revenues from 44 percent in the original contract.
“The Supreme Administrative Court agreed with the Central Administrative Court to overturn an arbitration ruling,” judge Charnchai Sawaengsakdi said.
ITV is 53 percent owned by Shin Corp , which Temasek has controlled since ousted Prime Minister Thaksin Shinawatra’s family sold control of Shin Corp to the Singapore state firm in January.
The PMO would hold a news conference on Thursday to declare how much it would fine ITV and offer to negotiate the amount of damages it would claim, a PMO official said.
If they could not agree, a civil court would have to decide the damages, a PMO legal adviser has said.
ITV, which operates Thailand’s third most popular television channel, posted a net profit of 679 million baht in 2005 on sales of 2.3 billion baht.
In the first nine months of 2006, the broadcaster had a net profit of 364 million baht, down 36 percent from a year earlier, mainly due to falling advertising revenues. ($1 = 35.25 Baht) (Additional reporting by Ploy Chitsomboon)