A woman joins protests against the sale of iTV to Singapore’s Temasek Holdings outside Shin Corp’s head office in March. The TV station’s future is hanging by a thread, much like the political fortunes of its former owner, caretaker Prime Minister Thaksin

 The fortunes of iTV Plc, the controversial television company, pretty much mirror those of its former owner, caretaker Prime Minister Thaksin Shinawatra.

Now encumbered by the prospect of having to pay a huge penalty of Bt76 billion, iTV could go under. Some activists, such as Jon Ungphakorn, the former senator, and Supinya Klangnarong, the secretary-general of the Campaign for Popular Media Reform, are campaigning for a revocation of iTV's licence so that this (hmmm...) independent broadcast station can be returned to the state. This would be nothing short of nationalisation.

At the same time, Thaksin's Thai Rak Thai Party is under threat of a lawsuit which could result in the Constitution Court ordering it to be dissolved. The Attorney General is awaiting an opinion from the Election Commission about the case of allegedly hiring smaller parties to run in the April 2 poll. Once it gets the opinion attached with the case, it can pass it on to the Constitution Court for immediate final ruling.

On January 9, 2004, iTV's stock shot up to Bt34.50 a share. The company became a market darling because of an impending arbitration panel ruling, which eventually resulted in a favourable revision of iTV's concession. Under its contract with the PM's Office, iTV is supposed to pay an annual concession fee of 44 per cent of revenue, or Bt1 billion, whichever is greater. But iTV said it was adversely affected by cable television and competition arising from disguised commercials on these local operators. The arbitration panel ruled in favour of iTV, allowing it to cut back its payment to only 6.5 per cent of revenue or Bt230 million.

This occurred when Thaksin's power was all-encompassing, and critics and academics lashed out furiously at the sweetheart deal, saying it was yet another example of policy corruption. Thaksin's Shin Corp then controlled 53 per cent of the iTV stake. In turn, the Shinawatra and Damapong families held at the time about 49 per cent of Shin.

Thaksin's popularity also peaked in February 2005 when going into the general election. His Thai Rak Thai Party garnered 19 million votes, compared to 11 million in 2001. Thaksin's power looked invincible and it seemed he would hang on as prime minister for life.

But in January, the Shinawatra and Damapong families drew flak from the public after they sold off their 49-per cent stake in Shin Corp to Temasek of Singapore for Bt73.3 billion. Charges flew that the Shinawatra and Damapong families were traitors because they had sold national assets to a Singaporean state enterprise. Temasek had become the new owner of iTV. Few countries would allow a foreign entity to take control of a local television station. The anti-Thaksin movement cried foul and before long they began to get more and more attention and support from the broader public.

The following month, Thaksin decided to dissolve the House of Parliament to avoid addressing the Shin Corp deal. He hoped the April 2 snap election would sweep Thai Rak Thai back into power unchallenged again and the people would let the Shin Corp deal slip from the radar screen. It didn't happen and Thaksin began to rapidly lose political capital among intellectuals and influential Thais. Mass demonstrations against Thaksin in Bangkok streets and elsewhere in the country dominated the news.

Still, Thai Rak Thai managed to get 16 million votes in the April 2 snap election, mostly from the rural electorates. But there would not be any election as hitherto predicted by the political pundits. The Constitution Court nullified the election as unconstitutional.

The PM's Office, meanwhile, had routinely appealed the iTV case to the Central Administrative Court. It was not expecting a result. But in May this year, as the tide turned against Thai Rak Thai, the Central Administrative Court reversed the ruling of the arbitration panel. As a result, iTV was ordered to pay Bt76 billion in fines because of its programming adjustments since 2004. iTV adjusted its programmes without first notifying the PM's Office.

So, in a nutshell, Thaksin's family has been accused of selling national assets to Singapore for Bt73.3 billion, while in a twist of irony, iTV has been ordered to pay back Bt76 billion to the state.

Temasek must be scratching its head in disbelief over the sudden shift in the political wind. It bought into Shin Corp on the assumption that Thaksin would deliver all the promises of political stability and honouring of contracts.

If iTV eventually has to pay a fine of Bt76 billion and Bt1.7 billion in backdated fees, its stock price would devalue to just Bt0.02, according to Seamico Securities. If iTV does not have the money to pay the fine, its debt might be converted into equity so that the PM's Office can then take control of it.

But iTV is arguing that it should pay a fine of only Bt100 million a year, or Bt274,000 a day, through its own formula for compensation. If this were to be the case, then its stock price would be valued at Bt3.47. Yesterday, iTV was trading at about Bt2.58, a far cry from Bt34.50 in January.

iTV's future is hanging by a thread, similar to the political fortunes of Thaksin and his Thai Rak Thai.

Given the current political mood, one only has to guess that it will be difficult for Temasek to keep control of iTV.

Similarly, Thaksin and his Thai Rak Thai may lose control of their political future at the hands of the highest courts in the land.

Thanong Khanthong

The Nation