Cablegate: Two Moves Against the Thai Media: Newspaper Avoids

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BANGKOK 006090

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 T
Bangkok Post (Ref A). Press freedom advocates, academics and the politi
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 acqui
Matichon shares back to the paper founder. The Bangkok Post has yet t
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 rar
victory for civil society was tempered somewhat as a popular political
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 Thaks
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
ost (Ref A). He also announced plans to take over an additional 43 perc
of the Matichon Group, eventually hoping to control 100 percent of comp
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 editor
independence. Thai civil society leaders immediately cried foul, recall
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 founde
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 potentia
wield a fair amount of influence. For this reason, many are calling on
Paiboon to divest himself completely of shares in both newspapers to pr
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
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 Maticho
the Thai- and English-language editorial pages were filled with article
hailing Grammy's retreat as a victory for Thai civil society and a warn
that businesses with political connections were interested in controlli
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,
Bangkok Post issue was often relegated to background material, even whe
they staged a rally at Government House on September 20. On September 2
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 i
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 t
cancellation of popular political television program "Muang Thai Rai
Sapdaa" (Thailand Weekly) hosted by respected journalist and businessma
Sondhi Limthongkul, and a former loyal supporter of the PM. The state-r
Channel 9 said the show had been canceled because Sondhi had made
inappropriate remarks with regard to the royal family. In his program,
Sondhi implied on numerous occasions that the King was angry with the T
government for exercising powers which are constitutionally reserved to
the crown, in the ongoing controversy over the designation of a nationa
Auditor-General (Ref B). The program had been on the air over a year, a
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,
state regulating body, for one baht (less than three cents) for crimina
and civil libel, and planned to file another for lost wages. Several
Democrat Party MPs, led by Sathit Wongnongtoey, filed a petition with t
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 deni
any involvement in last week's incidents. He admitted that he knew Paib
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
a normal stock transaction, and added that he did not devote himself to
any business dealings since he became Prime Minister. Regarding his for
ally Sondhi, the PM said that his administration had not been involved
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

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