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‘Taipan’ says radio row about politics

Shareholder clashes at the Digital Broadcasting Corporation spring from government’s desire to suppress its opponents, according to Albert Cheng
Peter So and Niall Fraser
Jul 29, 2012

A major shareholder’s decision to put the Digital Broadcasting Corporation at risk of liquidation by refusing to pump in extra cash is “politically motivated”, the station’s co-founder, ‘Taipan’ Albert Cheng King-hon, says.

Businessman Wong Cho-bau, who came to public attention earlier this year for offering a bargain lease on a luxury Shenzhen penthouse to the then-chief executive, Donald Tsang Yam-kuen, reportedly said he planned to cut his losses on his investment in the broadcaster, as it had struggled to generate revenue.

But Cheng put the blame for Wong’s reticence on the government, linking it with his own return to the airwaves and his decision to make the defeated chief executive candidate Henry Tang Ying-yen his first interviewee.

“This is all politically motivated. This government seems to want to go all out to suppress the opposition and get those who refuse to toe the line,” Cheng said yesterday. “Other investors in the station are worried that because of this, the government is dragging its heels on putting the infrastructure in place to allow the further expansion of digital radio.”

Cheng was the popular host of Commercial Radio’s controversial talk show Teacup in a Storm until he became a member of the Legislative Council in 2004. He co-founded DBC in 2008 with several partners, sealing a 12-year contract to run a Cantonese-language service.

Cheng said on Friday that the shareholders had “lost mutual trust,” as they were split on issues related to “the injection of capital and operational direction”.

Several other shareholders are understood to have sided with Wong, including the chairman of Vtech(SEHK: 0303), Allan Wong Chi-yun, the chairman of Bank of East Asia (SEHK: 0023) , David Li Kwok-poand David Li’s brother Arthur Li Kwok-cheung, a member of the Executive Council.

Between them they hold half of the company’s shares, against Cheng’s 23 per cent. Many are known to have close connection with Tsang.

Cheng said Wong, who has called in auditors to inspect DBC’s books, had other options. “Business-wise, Wong could have sold his shares to me. But he refused to do so,” Cheng said.

He claimed Wong had pledged in May to continue to invest when the shareholders agreed to inject HK$50 million into the company. “He [Wong] has been playing tricks since I’ve been on air. It is obviously political motivated.” Wong could not be reached for comment.

Cheng has accused the government of failing to improve the strength of transmission of digital radio signals. He also claimed in an article for a Chinese-language newspaper on Friday that Exco member Fanny Law Fan Chiu-fun, a key aide in Chief Executive Leung Chun-ying’s election campaign, was among those opposed to the growth of DBC.

A government spokesman refused to comment on Cheng’s claim of political interference, and said the government had invested tens of millions of dollars in digital.

Charles Mok, a pan-democratic candidate running for the information technology sector seat in September’s Legislative Council election, said it would be difficult to conclude that the government was stifling digital broadcasting for political reasons, though he criticised the government’s policy as “chaotic”. Mok will take on Legco member Samson Tam Wai-ho in the election.

“Disqualified person” application by DBC approved

The Government today (January 20) announced that the Chief Executive in Council (CE-in-Council) had approved the application by the Digital Broadcasting Corporation Hong Kong Limited (DBC) for Professor Arthur Li Kwok-cheung, a “disqualified person” (DP) under the Telecommunications Ordinance, to exercise control of the company as a chairman and director.

Professor Li is a DP under the Ordinance by virtue of his being a relative of a director (namely Dr David Li Kwok-po) of an associated corporation (namely PCCW Limited (PCCW)) of a domestic pay television programme service licensee (namely PCCW Media Limited (PCCW Media)).

“Since the DBC and PCCW Media are operating in two separate and distinct broadcasting markets, and Dr David Li as an independent non-executive director of PCCW does not have control or influence over the daily operation of PCCW or PCCW Media, the approval will not undermine the competition landscape in the broadcasting industry,” a spokesman for the Commerce and Economic Development Bureau said.

“The DBC, as a new player in the market, should be able to benefit from the expertise and experience of Professor Arthur Li with his appointment as a chairman and director in terms of enhancing the company’s governance and development. This should have a positive impact on the development of digital audio broadcasting services in Hong Kong,” the spokesman said.

He added that Professor Arthur Li would give an undertaking that in his role as a chairman and director and a shareholder of the DBC, he will act independently from any of his relatives in the media industry; exercise due care and attention to avoid editorial uniformity across different media platforms (including PCCW Media specifically); and abstain from discussions and decisions in connection with matters concerning both the DBC and PCCW Media.

Under the Ordinance, no DP, other than a person in respect of whom the reason for his being a DP was disclosed in the application of a licence, shall exercise control of a corporation that is a sound broadcasting licensee. A DP is defined under section 13A of the Ordinance which includes, among others, an “associate” of a domestic pay television programme service licensee within the meaning of the Broadcasting Ordinance. The provisions are to minimise the risks of media concentration, conflict of interest and editorial uniformity across different media platforms. The Ordinance further provides that the CE-in-C may, if he is satisfied that the public interest so requires, permit the licensee to enable a DP to exercise control of the licensee. In considering the public interest for approving a disqualified person application, the CE-in-C has taken account of the effect on competition in the relevant service market; the extent to which viewers will be offered more diversified television programme choices; the impact on the development of the broadcasting industry; and the overall benefits to the economy.

Ends/Friday, January 20, 2012
Issued at HKT 19:02


(B) Extent to which listeners will be offered more diversified

programme choices

8. DBC submitted that Professor Arthur Li’s extensive experience

in medicine, education and research, and relationship network with both

local and global institutions in the academic and medical fields would

enable him to provide professional advice on the medical and educational

programmes of DBC, resulting in an enhancement of programme quality

and more diversified programme choices to listeners.

(C) Impact on the development of the sound broadcasting industry

and overall benefits to the economy

9. DBC submitted that Professor Arthur Li has extensive network

and experience in both public and business sectors.  He is currently Deputy

Chairman of The Bank of East Asia Limited (4) and an independent director

of Shangri-La Asia Limited(5).  He was Vice-chancellor of The Chinese

University of Hong Kong from 1996 to 2002 and Secretary for Education

and Manpower from 2002 to 2007.  DBC submitted that Professor Li

would bring to DBC substantial management know-how, expertise and

opportunities to form strategic partnership with academic institutes and

innovators promoting the development of DAB services.

Our Assessment

10. As regards the effect on competition in the relevant service

markets, DBC and PCCW Media are operating in two distinct broadcasting

markets (i.e. sound broadcasting and pay television respectively).  They

have different target audiences and are not in direct competition with each


Since DBC and PCCW Media are operating in two separate broadcasting

markets, and Dr David Li as an independent non-executive director of

PCCW does not have control or influence over the daily operation of

PCCW or PCCW Media, the proposed appointment of Professor Arthur Li

as a director and Chairman of DBC is unlikely to bring negative impact on

the competition landscape in the sound broadcasting service or the markets

for domestic pay television programme services or subscription television


11. As regards the diversification of radio programme choices, while

Professor Li will not participate in the daily operation of DBC, he would

offer solid and authoritative advice to the board on the programming

strategy of DBC (8) .

12. As regards the impact on the development of the sound

broadcasting industry, Professor Arthur Li is one of the founding

shareholders of DBC who had provided funding for the conduct of

feasibility studies and technical trials of DAB before DBC was granted a

licence to provide DAB service.  DAB is a new service, and further

injection of capital may be required.  The roll-out of network and

production of new programmes would also require significant resources

and expertise in both execution and delivery.  DBC is still a fledgling

company, and good corporate governance, to which Professor Li’s

managerial experience will contribute, is instrumental to the future

development of the company.  Given Professor Li’s connection, expertise

and experience in the private and public sectors, DBC should benefit from

his appointment as director and Chairman, which will in turn have a

positive impact on the overall development of DAB in Hong Kong.

Professor Li’s relationship with a non-executive director of an associated

corporation of a pay TV programme service licensee is not likely to

adversely impact on the development of the sound broadcasting industry.

13. As regards the benefits to the economy, the broadcasting and

programming sector contributed an estimated $5.4 billion of value added to

the economy in 2010, representing around 0.3% of GDP.  The proposed

appointment of Professor Arthur Li, notwithstanding his DP status, is not

likely to have any adverse impact on the overall economy.

‘Loss of mutual trust’ at Albert Cheng station
Dispute among shareholders of new digital radio broadcaster forces a special board meeting
Peter So and Tanna Chong
Jul 28, 2012

The future of the newly established Digital Broadcasting Corporation is uncertain after its co-founder, “Taipan” Albert Cheng King-hon, said yesterday the shareholders had “lost mutual trust”.

In a statement by the radio broadcaster after a board meeting, DBC said some shareholders were split on issues related to “the injection of capital and the operational direction”. They plan to hold a special board meeting to resolve the row.

Cheng gave no details, saying only that the differences were not related to money but about “the ways of running a business”.

He refused to say whether the differences were based on the editorial direction of the station’s current affairs programmes, which have criticised the government. “‘Ways of running a business’ can refer to a lot of things,” he said.

Cheng, a former lawmaker and a veteran radio host, made a name for himself hosting Commercial Radio’sTeacup in a Storm from 1995 to 2004, often criticising the government.

In 2008 he was granted a 12-year licence to run a 24-hour Cantonese-language radio station, with an investment in the first six years estimated at HK$620 million.

The station has rolled out seven digital broadcasting channels since August last year.

DBC shareholders include Executive Council member Professor Arthur Li Kwok-cheung, former Exco convenor Ronald Arculli, Bank of East Asia (SEHK: 0023) chairman David Li Kwok-po and businessman Wong Cho-bau, who came to public attention when it was revealed he was leasing a luxury Shenzhen penthouse to former chief executive Donald Tsang Yam-kuen.

Cheng and Wong are the largest shareholders, jointly owning about 43 per cent of the shares.

Cheng declined to say whether he was under political pressure from any shareholder. He was optimistic the differences could be sorted out and said: “I hope we can find a few more days [to resolve this].”

Wong refused to comment, saying only that he would return from vacation in early August.

The broadcaster’s statement said: “A special board meeting will be convened as soon as possible.

“We are consulting legal advice in order to protect the interests of shareholders, staff members, business partners and the public. DBC [will] maintain normal operation until further notice.”

Lam Yuk-wah, a long-term partner who co-hosts programmes with Cheng, said Cheng had hinted that he was under pressure about how programmes were being produced.

But Lam said it was difficult to tell whether criticisms of the government were part of the problem.

“I still think I can speak freely on air,” he said. He did not think the broadcaster was facing financial difficulties.

In a statement, the Commerce and Economic Development Bureau said talks had been held with DBC’s management.

It said: “We understand that there is some disagreement between the shareholders of DBC and it would not be appropriate for the government to intervene or comment.”

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