Media giant retreats from bid to take over publisher

On 16 September 2005, the Thai entertainment and media giant GMM Grammy Group retreated from its bid to take over a leading publisher, Matichon Plc, following unprecedented resistance driven by fears the bid would undermine media independence.

GMM Grammy Chairman Paiboon Damrongchaitham told a press conference that his company had agreed to reduce its current 32.23 per cent stake in Matichon to 20 per cent to allay concern that his company attempted to influence the publisher’s policies.

The media community, academics and rights groups cautiously welcomed Grammy’s retreat. They agreed on the need for continued vigilance to guard against any further hostile takeover bids that could undermine the media’s credibility and independence.

Paiboon said he was still continuing with his plan to acquire a major stake in Post Publishing, publisher of the English-language daily “Bangkok Post”, a move that has faced little resistance compared to the Matichon deal.

On 20 September, a small group of “Bangkok Post” journalists rallied in front of the Government House to protest Grammy’s takeover threat. They also urged its owners to stop interfering with editorial content, a practice that has haunted the newspaper over the last two years.

BACKGROUND:
On 12 September, Paiboon stunned the public by announcing the company’s 3-billion-baht (approx. US$73 million) bid for Matichon and Post Publishing. The bid, if successful, would have made GMM Grammy the country’s largest publishing house with five daily newspapers: “Matichon”, “Khao Sod” and “Prachachart Thurakij” in the Matichon camp and the “Bangkok Post” and “Post Today” in the Post Publishing camp.

Critics were quick to say the takeover bid was far from a purely commercial matter since it would allow the company to influence the newspapers’ policies. Paiboon is known to have close ties with Prime Minister Thaksin Shinawatra, whose family business empire Shin Corp set a precedent for media takeovers by taking control of Thailand’s only independent television
station, iTV, in 2002

The Thai Journalists Association, Thai Broadcast Journalists Association and Economic Reporters Association said GMM Grammy’s takeover represented an unprecedented concentration of media ownership. “This will bode ill for the public’s right to know,” the associations said in a 15 September statement.

The three professional advocacy groups vowed to work together and ally with civil-society groups and academics to ensure the public’s right to know will not be compromised or used as a bargaining chip for political and economic vested interests.

So far, several public forums have been held to address the situation and consider measures to guard against these hostile media takeovers.

Among the recommendations was to undertake a review of the newspaper market and consider measures that prevent cross-media takeovers and safeguard media independence and pluralism. The idea of having a labour union at individual newspapers and at the national level was raised as a long-term strategy to safeguard against market interference in newspapers’ editorial policies.

Stakeholders, including readers of Matichon newspapers, Matichon shareholders and student groups, threatened to boycott Grammy’s products if they persisted with the take-over bid.

21 September 2005
Source: Southeast Asian Press Alliance (SEAPA), Bangkok