=UPDATED= Next Media Parceled Out to Five Buyers

Tea pickers on the slopes of Alishan

UPDATE: I'm moving this to the top. Finally heard the reason for the fifth buyer. By adding the fifth buyer, they can separate the print and TV portions of the deal, meaning that the NCC can't impose the same condition of separation of cable TV and print they tried to before. The new deal also reduces Jeffrey Koo Jr's holding to just below the threshold required by the FSC. Next Media, as a friend observed, had the most powerful investigative team in the business. How much longer do you think that will remain true?

Student protests in front of the FTC and the legislative Yuan all day too. But the number is too small to gain international media attention, judging from the photos.

Adventures in Charity, episode #249:
I'm buying tickets at the Chiayi train station on Sunday with a big pile of 100 NT notes. A girl behind me in line leans forward and asks if I could loan her $100. I said sure, no problem, and slipped her a 100 NT note. She then asked me how she could pay me back. "What's your phone number?" "Forget it," I said, "I don't live here. You don't have to pay me back." Suddenly she looked at me crossly. "Hey!" she barked. "What kind of attitude is that?"

I put that tale there because you'll need some light humor to deal with the Next Media deal. A friend summed up the five buyers of Jimmy Lai's Next Media thusly:

• Chinatrust Charity Foundation chairman, Jeffrey Koo Jr.
• Formosa Plastics Group chairman, William Wong
• Want Want China Times Group chairman, Tsai Eng-meng
• Lung Yen Life Service Co. chairman, Lee Shih-tsung
• Taiwan Fire and Marine Insurance Co. chairman, Lee Tai-hung.

Businessweek explained the deal, inked in Macau for tax purposes:

Next Media will sell its Taiwan print assets to four investors including Want Want Chinatimes Group President Tsai Shao-Chung, William Wong of the Formosa Plastics Group, Chinatrust Charity Foundation Chairman Jeffrey Koo Jr. and Lung Yen Life Service Corp. (5530) Chairman Lee Shih-tsung, Simon said.

Lai, known for criticizing the Chinese government, is exiting most of his Taiwan businesses after battling regulators for licenses and distribution rights. The investment by Tsai, son of Want Want China Holdings Ltd. (151) Chairman Tsai Eng-meng, may raise regulatory concerns as Lai’s Apple Daily and the Tsais’ China Times will have a combined newspaper market share exceeding 45 percent, according to National Chung Cheng University’s Kuang Chung-Hsiang.

...

Lee Tai-hung, chairman of Taiwan Fire & Marine Insurance Co. (2832), replaces Tsai in the group buying the television assets, Simon said. The pacts were signed yesterday, he said.

The deal requires approval from the Fair Trade Commission, the National Communications Commission, and the Financial Supervisory Commission. Each may find reason to balk. The FSC had objected to Jeffrey Koo Jr's 7% stake in a financial firm (blogged). The Fair Trade Commission may not like the 45% share of the media market it gives the Tsai media operations. The National Communications Commission, you may recall, gave tentative approval but required Tsai to sell off his cable TV operations. Tsai gave the NCC the digitus impudicus, and the case is now in the courts.

The articles in the international media tended to (wrongly) frame the issue as a pro/anti-China affair. For example, the AP article on the deal is solid as far as it goes, but it wrongly characterized the student protests as anti-China when they are pro-democracy. The business publications covering the story pointed out that it is likely that the Tsai-owned media will go soft on China's territorial expansion and other problems, but failed to mention that Apple and Next Media also provide independent coverage of domestic corporate shenanigans, including environmental stories that other media don't publish.

Also, I heard tell of a rumor running around that one of Taiwan's online media outfits, NOWNEWS or ETTODAY, is going to be bought by a Chinese firm. Take with NaCl.....

ADDED: Taipei Times editorial on the sale.
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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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[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.