A source at Thai Beverage Plc, which is majority owned by liquor baron Charoen Sirivadhanabhakdi who also owns DhoSpaak, said problems at iTV opened a wide opportunity for Charoen to take over the television company.

"The majority shareholder of iTV might have to sell its stake under legal pressure, while the Central Administrative Court is deciding whether to reimpose the original concession fee on the company. All this will make the company a very cheap target," the source said.

With investors fearing that ITV might have to pay the original concession fee, which would devastate its net profit, the company's share price has nose-dived 25.49 per cent in the past week. From Bt10.20 on April 7, it ended at Bt7.60 on Wednesday.

iTV is now facing two big problems, the shareholding structure and the concession fee.

Following the takeover by Singapore's state investment arm Temasek Holdings of Shin Corp, there is pressure on Temasek to liquidate its stake in iTV. Under the Constitution, foreign ownership is prohibited in broadcasting businesses, but the fact that Temasek holds 92 per cent of Shin, which in turn owns 53 per cent of iTV, means iTV is half-owned by foreign investors.

Rosana Tositrakul, chairwoman of the Federation of Consumer Organisations, said the federation had in March petitioned the National Telecommunications Commission to look into this. She said last week that given the agency's silence so far the federation would forward the case to the Central Administrative Court.

The pressure has prompted rumours that GMM Grammy, the country's largest entertainment company, is interested in taking over the television company.

Also at stake now is iTV's financial position. Research shows that if the Central Administrative Court rules on May 9 that iTV must resume the original concession-fee schedule and the original content requirement, the company will immediately post a sharp loss.

KGI Securities (Thailand) researchers said: "If the court rules against iTV's position, iTV will need to pay concession fees of Bt1.2 billion-Bt1.7 billion per year, up from the current Bt230 million, and the company will also need to pay backdated concession fees of around Bt1.5 billion. If this were to happen, iTV's fair price would plunge to Bt3.9 per share."

The securities house estimated that if iTV had to borrow to finance the backdated concession fee, it would swing to a net loss of Bt1.49 billion this year against the forecast net profit of Bt1.06 billion. Meanwhile the company's net debt will be 1.5 times its equity, against a forecast net cash position.

KGI noted that iTV should not lose as the current concession fees, based on the arbitrator's ruling in 2004, were justified to create a level playing field among free-to-air television operators. "Given the political uncertainties after Thaksin leaves and the anti-Thaksin sentiment, there are concerns within the market that the court will rule against the company."

If the Central Administrative Court rules that iTV must resume the original concession fee, that will plunge the company into huge trouble and pave the way for a takeover by any interested party, including Charoen's DhoSpaak.

Since its inception, DhoSpaak has won the exclusive rights for the broadcast of several big sports events, including the 2006 FIFA World Cup. iTV would broaden the company's network, said the source from Thai Beverage.

"DhoSpaak has no experience in running a television channel, but there is no problem: that could be subcontracted to any company," the source said.

Shin Corp Plc and iTV Plc executives have so far refrained from commenting on the future of iTV, but the day of reckoning is expected to come sooner or later.

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