Thursday, November 15, 2012

Next Media Mess

Last month the big deal went through: publisher Jimmy Lai of Hong Kong decided to sell off his NextMedia's print and television operations in Taiwan. The buyer at that time was Jeffrey Koo, Jr. The sale was widely seen as a blow to media independence in Taiwan, since Next Media does a great job throwing light in dark places, and Apple Daily, despite its front pages splashed with sex and gore, did manage to establish itself as a relatively non-partisan news source.

New wrinkle emerged this week: the Financial Supervisory Commission (FSC) is balking at the sale to Jeffrey Koo, Jr. The China Post observes:
The Financial Supervisory Commission (FSC, 金管會) yesterday ruled that Chinatrust Charity Foundation Chairman (中信慈善基金) Jeffrey Koo Jr. (辜仲諒) is not eligible to run Next Media or be the representative of signatories to buy the group.

Although Koo has only 7 percent of the shares of Chinatrust Financial Holding Co. (中國信託), the FSC ruled that his position as director of that company, and his father Jeffrey Koo Sr.'s (辜濂松) position as chairman, means he is prohibited by law from running Next Media.

FSC regulations stipulate that financial institutions cannot step into the operation of companies in other industries.
According to the report, another prominent Taiwan magazine, Wealth Magazine, reported that Tsai Eng-meng (Robert Tsai), the fanatically pro-China owner of the WantWant Group, is one of the backers of the purchased. Tsai denies this, but many media reports have put his name on this purchase. Wealth Magazine said that Tsai would put an end to Next Media's habit of investigative reporting. Koo has stated publicly that he would respect the magazine's editorial independence (take cynical comment as read). In response to the FSC's disapproval of Koo, Formosa Plastics, also allegedly part of the deal, is alleged to have raised its stake in the deal.

Some of you may be scratching your head over Koo. That's the same Koo who was on the lam from authorities. Hilarity will ensure when this Taipei Times report reminds you....
One of the financial scandals in which Koo was involved was Chinatrust Financial’s flawed bid for rival Mega Financial Holdings Co (兆豐金控) in 2006 — known as the Red Fire Case (紅火案), after the name of the offshore company used to conduct the illegal transaction. He had evaded an arrest warrant and hid in Japan for two years before returning to Taiwan in 2008. He was the vice chairman of Chinatrust Financial at the time.

Chen Hsiao-yi (陳曉宜), organizer of the alliance, said Koo Jr was not fit to run a media business because he had been sentenced to nine years in jail by the Taipei District Court in 2010 for the illegal takeover bid for Mega Financial in violation of the Securities Exchange Act (證券交易法) and the Banking Act (銀行法).
So...the FSC thinks that a guy with a 7% stake in a firm is in violation of the rules preventing finanicial firms running media operations, but that it is perfectly ok for this same fella who has been convicted of illegal financial transactions and has been sentenced to nine years (case is on appeal) in slammer to be running a charity foundation and be a director of a ChinaTrust Financial. Probably this has nothing to do with the fact that the Koos are a powerful pro-KMT family.

Interestingly enough, the Taipei Times article did not mention that the reason Koo returned to Taiwan in 2008 was to testify in the Chen Shui-bian case (last year Koo was one of the factors in the lawsuit from 26 civic groups about the Chen case). Yes, that's right -- you can get sentenced to nine years in jail and confess to involvement in bribing the President, and the FSC will still accept you as a director of a large charity concern and a trust company and object to your owning a media firm on the grounds that you are involved in running a trust company -- not because you are a convicted crook.
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