FOT (FRIEND OF THAKSIN) BUYS UP HUGE SHARES IN TWO

C O N F I D E N T I A L SECTION 01 OF 02 BANGKOK 005940

SIPDIS

E.O. 12958: DECL: 09/15/2015
TAGS: PGOV PHUM KPAO PINS PROP TH HUMAN RIGHTS
SUBJECT: FOT (FRIEND OF THAKSIN) BUYS UP HUGE SHARES IN TWO
OF THAILAND'S LEADING NEWSPAPERS

REF: BANGKOK 5419

Classified By: POLITICAL COUNSELOR SUSAN M. SUTTON. REASON: 1.4 (D)


1. (U) SUMMARY. Within two days, Thailand's largest
entertainment conglomerate spent $US 66 million dollars to
buy 32% and 23% of shares in the parent companies of two of
Thailand's leading newspapers- Matichon, and the Bangkok Post
respectively. The company's President, Mr. Paiboon
Damrongchaitham, is known to have political connections to
the government of Prime Minister Thaksin Shinawatra. Press
freedom groups and opposition lawmakers predictably condemned
the move as a blow for freedom of the press in Thailand.
Paiboon sought to deflect criticism at a press conference in
which he guaranteed that the newspapers would maintain their
editorial independence, and that there wouldn't be any
restructuring or layoffs. Matichon's founder is reportedly
planning to launch a counterbid to prevent Paiboon from
gaining control of a majority of shareholders. End summary.


2. (U) On September 12 and 13, Thailand's largest
entertainment conglomerate GMM Grammy Public Company, bought
over 32% of shares in Matichon and over 23% of shares in the
parent company of the Bangkok Post, making it the largest
shareholder in both enterprises. The Bangkok Post is one of
Thailand's two leading English-language newspapers and is
widely read by the local international community, and
Thailand's well-educated elite. Matichon runs several of
Thailand's leading Thai-language newspapers including their
namesake paper, Matichon. GMM also reportedly plans to buy up
at least an additional 43% of shares in Matichon. The total
cost of yesterday's buying spree amounted to 2.7 billion baht
($US 66 million) The President of GMM, Mr. Paiboon
Damrongchaitham, is known to have close ties with the Thaksin
administration and his GMM company has often been used to do
publicity for the administration.

REACTION OF CIVIL SOCIETY


3. (SBU) Press freedom advocates were understandably
concerned by the move, which they are certain will result in
restrictions on the editorial freedom of the papers in
question. They point to the 2000 precedent set by the
acquisition of a majority of shares in Thailand's only
private TV station, iTV, by Shincorp, (NOTE: Shin Corp. is
owned by the family of Prime Minister Thaksin Shinawatra. END
NOTE) which resulted in a pro-government shift in TV news
coverage. Mr. Kavi Chongkittavorn, senior editor of the
English-language Nation, told Poloff that the recent
acquisition of shares by well-connected political figures has
affected the Nation's editorial direction.

TYCOON PAIBOON ASKS THAIS "NOT TO WORRY ABOUT MEDIA FREEDOM"


4. (U) Paiboon gave a press conference on September 13,
explaining that his acquisition of the shares in the two
newspapers was meant to "establish synergy" between his
entertainment business and the publishing world, and that he
and his company would not interfere in the editorial content
of the papers. He went so far as to assure media-watchers
that the newspapers would "even able to cheer on (his rival)
RS Promotion." Paiboon also promised that there would be no
restructuring or layoffs at any of the newspapers nor would
there be any mergers. Political opposition leaders, members
of civil society and journalists at the two newspapers are
not convinced, and have lamented the move as further evidence
of a decline of press freedom in Thailand. Senator Jon
Ungphakorn summed up the situation, saying "(These
newspapers) produce outstanding investigative reports on the
government....But now, that independence is insidiously being
jeopardized." The Campaign for Media Reform issued a
statement which noted its "profound concern" regarding the
situation.


5. (U) Both the Bangkok Post and Matichon are facing
substantial libel lawsuits from companies affiliated with the
government (Reftel A). Several of the smaller Thai
newspapers, including Naeo Na and the Thai Post, are facing
similar lawsuits. Roby Alampay of the Southeast Asian Press
Alliance opined that "All of these (libel suits) were serving
to soften up the press."


6. (U) Matichon founder Khanchai Boonpan and his editorial
staff have vowed to fight the hostile takeover, which caught
them very much by surprise. The Nation reported that he had
secured 31% of shareholder support (NOTE: Khanchai reportedly
owns 24% of shares. END NOTE) and was considering a number of
strategies in order to prevent GMM from obtaining majority
control of the newspaper, including a counterbid. In
anticipation of a potential bidding war, prices for Matichon
stocks are rising quickly.

OPPOSITION NOT HAPPY EITHER


7. (C) COMMENT. The opposition Democrat Party (DP) is echoing
the concerns of press freedom advocates. DP Secretary
General Suthep Thaugsuban told Polcouns on September 14 that
the DP is finding it difficult to get air time and page space
on Thailand's electronic media and newspapers. Suthep
claimed that even media companies that are not controlled
outright by Thaksin and his family (like iTV and Shincorp)
are fearful of giving time and space to the opposition,
fearing that the government will pull lucrative advertising
contracts. Suthep complained that he has had to call
Suranand Vejjajiva, Minister attached to the Prime Minister's
office, and the person PM Thaksin has put in charge of media
issues, in an attempt to get air time for DP leader Abhisit
Vejjajiva's rebuttal of the PM's regular Saturday radio
broadcasts, with no satisfaction to date. END COMMENT
ARVIZU