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"Disqualified person" applications by TVB

The Government today (October 28) announced that the Chief Executive in Council (CE in Council) had completed the processing of applications by Television Broadcasts Limited (TVB). The CE in Council decided to grant approval for Mr Anthony Lee to exercise control of the company from today onwards as a "disqualified person" under the Broadcasting Ordinance (BO), but refused to grant retrospective approval for Mr Chien Lee, Mrs Christina Lee and Mr Anthony Lee to exercise control of TVB as disqualified persons for certain periods before today.

Under the BO, no disqualified person shall exercise control of a domestic free television programme service (free TV) licensee unless approved otherwise by the CE in Council.

Mr Chien Lee has been an independent non-executive director of Swire Pacific Limited, which owns Swire Properties Hotel Management Limited (SPHM), another licensable television programme service licensee. Mr Chien Lee, as a director of an associated corporation of SPHM, and his two relatives, Mrs Christina Lee and Mr Anthony Lee, have become disqualified persons in relation to TVB.

A spokesman for the Commerce and Economic Development Bureau said, "Mr Anthony Lee has served as an alternate director or a non-executive director of TVB since September 2002. His extensive experience should continue to be conducive to the operation and growth of TVB.

"With TVB being a key player in the local television industry, Mr Anthony Lee's positive contribution to its development should be of benefit to the broadcasting sector as a whole. This constitutes public interest gain justifying the approval of Mr Anthony Lee to exercise control of TVB as a disqualified person from today onwards."

The spokesman said that TVB and SPHM are operating in two distinct broadcasting markets. Given the distinctly different nature of the programmes offered, and as neither Mr Anthony Lee nor Mr Chien Lee have any executive or managerial function in TVB or SPHM and cannot, individually or collectively, influence the daily operation of the two companies, the approval is unlikely to have any negative impact on the competition landscape in the respective service markets, nor result in increased editorial uniformity or media concentration.

However, the CE in Council refused to grant retrospective approvals for Mr Chien Lee, Mrs Christina Lee and Mr Anthony Lee to exercise control of TVB for certain periods before today - Mr Chien Lee as an independent non-executive director from October 2, 2009 until the cessation of his term of appointment on May 15, 2014; Mrs Christina Lee as non-executive director from October 2, 2009 through to her retirement on February 3, 2012; and Mr Anthony Lee as alternate director to Mrs Christina Lee in the aforementioned period and as non-executive director thereafter.

"The licensee is obliged to ensure, at all times, compliance with the disqualified persons provisions under the BO until the CE in Council's requisite approval is given. Granting retrospective approvals may have a wrong signal that the authorities are not enforcing the relevant statutory provision seriously," the spokesman said.

As retrospective approvals were not given by the CE in Council, he added that the Communications Authority would follow up on TVB's alleged breach of the disqualified persons provisions during certain periods before today.

In processing the applications submitted by TVB on March 3, 2014, the CE in Council considered all factors relevant to public interest, including 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 overall benefits to the economy.

In relation to a free TV licence, a "disqualified person" includes another licensee under the BO, a sound broadcasting licensee, an advertising agency or a proprietor of a newspaper printed or produced in Hong Kong, as well as their controllers and associates. Therefore, an "associate" of a holder of an other licensable television programme service license issued under the BO, including a director of an associated corporation of the licensee and a relative of the director, is a disqualified person.

Tuesday, October 28, 2014