UNCLAS SECTION 01 OF 02 BANGKOK 006096

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PHUM KPAO PINS PROP TH HUMAN RIGHTS
SUBJECT: TWO MOVES AGAINST THE THAI MEDIA: NEWSPAPER AVOIDS
TAKEOVER BUT TV SHOW GETS THE AXE

REF: A. (A) BANGKOK 5940


B. (B) BANGKOK 5917


1. (U) SUMMARY. On September 12, Thai entertainment tycoon
Paiboon Damrongchaitham of GMM Grammy shocked Thailand by
attempting a hostile takeover of the Matichon Group, as well as
buying up a large stake in The Bangkok Post (Ref A). Press
freedom advocates, academics and the political opposition
strongly condemned the move, going so far as to threaten a
boycott of Grammy products. Unlike other recent cases of press
intimidation, the story stayed on the front pages of the news
and on September 17, Paiboon agreed to sell back 14 percent of
its newly acquired Matichon shares back to the paper founder.
The Bangkok Post has yet to ward off Paiboon, but may have an
offer from Robert Kuok, the owner of Hong Kong's South China
Morning Post, who is close to Beijing. This rare victory for
civil society was tempered somewhat as a popular political TV
program was canceled by a state-run channel on September 15, on
the pretense that the host had made inappropriate remarks by
characterizing the views of the royal family. In his weekly
press conference, PM Thaksin insisted he had not been involved
in either matter. END SUMMARY


2. (U) On September 12th, Thai entertainment tycoon Paiboon
Damrongchaitham of GMM Grammy shocked journalists and press
freedom advocates by announcing that he had bought up 32 percent
of the parent company of Matichon and 24 percent of the parent
company of the Bangkok Post (Ref A). He also announced plans to
take over an additional 43 percent of the Matichon Group,
eventually hoping to control 100 percent of company shares.
Paiboon, who is known to be close to PM Thaksin Shinawatra,
alleged the move was purely a business matter and that all media
enterprises under his control would be able to maintain complete
editorial independence. Thai civil society leaders immediately
cried foul, recalling the 2000 takeover of independent TV
station iTV by Shincorp, which resulted in a sharp decrease in
the station's critical coverage of the government. [NOTE:
Shincorp is owned by the family of PM Thaksin. END NOTE]

3. (U) Press freedom advocates, academics and the political
opposition immediately condemned the purported buyout, with some
even talking of a boycott of Grammy products. After several days
of negative publicity, Paiboon decided the hostile takeover was
more trouble than it was worth and agreed both to refrain from
making further acquisitions of Matichon stock and to sell back
14% of its new shares back to the paper founder Khanchai.
Paiboon still intends to hold on to a 20 percent stake in
Matichon, and GMM Grammy is expected to have a seat on the
company's board, leaving the door open for the company and its
allies to potentially wield a fair amount of influence. For this
reason, many are calling on Paiboon to divest himself completely
of shares in both newspapers to prove that he has truly given up
on any ambitions to control the newspaper.

PAIBOON BACKS DOWN, MATICHON REVELS IN VICTORY


4. (U) Unlike many previous freedom of the press stories, the
takeover of the Thai-language Matichon garnered widespread
national attention and stayed on the front pages of the Thai-
and English-language dailies for several days. Even after
Paiboon agreed to halt his takeover of Matichon, the Thai- and
English-language editorial pages were filled with articles
hailing Grammy's retreat as a victory for Thai civil society and
a warning that businesses with political connections were
interested in controlling the nation's newspapers. Khanchai
Boonpan, Matichon's founder, and the Thai press have been seen
as the biggest winners after the botched takeover. A September
19th Matichon editorial promised readers that "regardless of a
20 percent thorn in our flesh, we shall not change for the
worse."

BANGKOK POST: BEING SOLD DOWN THE RIVER TO CHINA?


5. (U) Although the announcements were made the same day, there
was significantly less media attention given to Paiboon's
takeover of 25 percent of the English-language Bangkok Post.
Whereas the staff of Matichon could be seen linking hands on the
front pages of newspapers, the Bangkok Post issue was often
relegated to background material, even when they staged a rally
at Government House on September 20. On September 22, The Nation
reported that Robert Kuok, who owns the South China Morning
Post, Hong Kong's leading English-language newspaper, was
considering making an offer on Paiboon's newly acquired shares.
Billionaire Kuok already controls a 20 percent stake in the
Post's parent company, and is known to be very close to Beijing.

SETBACKS: POPULAR POLITICAL TV PROGRAM FORCED OFF THE AIR


6. (U) In marked contrast to the Matichon victory, September
15th saw the cancellation of popular political television
program "Muang Thai Rai Sapdaa" (Thailand Weekly) hosted by
respected journalist and businessman Sondhi Limthongkul, and a
former loyal supporter of the PM. The state-run Channel 9 said
the show had been canceled because Sondhi had made inappropriate
remarks with regard to the royal family. In his program, Mr.
Sondhi implied on numerous occasions that the King was angry
with the TRT government for exercising powers which are
constitutionally reserved to the crown, in the ongoing
controversy over the designation of a national Auditor-General
(Ref B). The program had been on the air over a year, and was
popular among the politically savvy Thai elite. Mr. Sondhi
angrily denounced the cancellation, and moved his show to ASTV
Channel 1, a private satellite TV station which is estimated to
have fewer than 1000 subscribers. In his own symbolic act of
protest, Sondhi has sued MCOT, the state regulating body, for
one baht (less than three cents) for criminal and civil libel,
and planned to file another for lost wages. Several Democrat
Party MPs, led by Sathit Wongnongtoey, filed a petition with the
National Ombudsman asking for a ruling on whether this violated
the constitutionally guaranteed freedom of the press.

THAKSIN OFFERS HIS VIEWS- "DON'T DRAG ME INTO THE MATTER"


7. (U) On September 22, at his weekly press conference, PM
Thaksin denied any involvement in last week's incidents. He
admitted that he knew Paiboon well but said that "it [would be]
a stupid move for me to buy into Matichon for political and
business reasons," since there were so many other media outlets
in the country. He saw the hostile takeover attempt as a normal
stock transaction, and added that he did not devote himself to
any business dealings since he became Prime Minister. Regarding
his former ally Sondhi, the PM said that his administration had
not been involved in the show's cancellation, but that it was
within the rights of MCOT and Channel 9 to cancel a program it
felt was inappropriate.
BOYCE