US embassy cable - 05BANGKOK5940

C O N F I D E N T I A L SECTION 01 OF 02 BANGKOK 005940 
 
SIPDIS 
 
E.O. 12958: DECL: 09/15/2015 
TAGS: PGOV, PHUM, KPAO, PINS, PROP, TH, HUMAN RIGHTS 
SUBJECT: FOT (FRIEND OF THAKSIN) BUYS UP HUGE SHARES IN TWO 
OF THAILAND'S LEADING NEWSPAPERS 
 
REF: BANGKOK 5419 
 
Classified By: POLITICAL COUNSELOR SUSAN M. SUTTON.  REASON: 1.4 (D) 
 
1. (U) SUMMARY. Within two days, Thailand's largest 
entertainment conglomerate spent $US 66 million dollars to 
buy 32% and 23% of shares in the parent companies of two of 
Thailand's leading newspapers- Matichon, and the Bangkok Post 
respectively. The company's President, Mr. Paiboon 
Damrongchaitham, is known to have political connections to 
the government of Prime Minister Thaksin Shinawatra. Press 
freedom groups and opposition lawmakers predictably condemned 
the move as a blow for freedom of the press in Thailand. 
Paiboon sought to deflect criticism at a press conference in 
which he guaranteed that the newspapers would maintain their 
editorial independence, and that there wouldn't be any 
restructuring or layoffs. Matichon's founder is reportedly 
planning to launch a counterbid to prevent Paiboon from 
gaining control of a majority of shareholders.  End summary. 
 
2. (U) On September 12 and 13, Thailand's largest 
entertainment conglomerate GMM Grammy Public Company, bought 
over 32% of shares in Matichon and over 23% of shares in the 
parent company of the Bangkok Post, making it the largest 
shareholder in both enterprises. The Bangkok Post is one of 
Thailand's two leading English-language newspapers and is 
widely read by the local international community, and 
Thailand's well-educated elite. Matichon runs several of 
Thailand's leading Thai-language newspapers including their 
namesake paper, Matichon. GMM also reportedly plans to buy up 
at least an additional 43% of shares in Matichon. The total 
cost of yesterday's buying spree amounted to 2.7 billion baht 
($US 66 million) The President of GMM, Mr. Paiboon 
Damrongchaitham, is known to have close ties with the Thaksin 
administration and his GMM company has often been used to do 
publicity for the administration. 
 
REACTION OF CIVIL SOCIETY 
 
3. (SBU) Press freedom advocates were understandably 
concerned by the move, which they are certain will result in 
restrictions on the editorial freedom of the papers in 
question. They point to the 2000 precedent set by the 
acquisition of a majority of shares in Thailand's only 
private TV station, iTV, by Shincorp, (NOTE: Shin Corp. is 
owned by the family of Prime Minister Thaksin Shinawatra. END 
NOTE) which resulted in a pro-government shift in TV news 
coverage. Mr. Kavi Chongkittavorn, senior editor of the 
English-language Nation, told Poloff that the recent 
acquisition of shares by well-connected political figures has 
affected the Nation's editorial direction. 
 
TYCOON PAIBOON ASKS THAIS "NOT TO WORRY ABOUT MEDIA FREEDOM" 
 
4. (U) Paiboon gave a press conference on September 13, 
explaining that his acquisition of the shares in the two 
newspapers was meant to "establish synergy" between his 
entertainment business and the publishing world, and that he 
and his company would not interfere in the editorial content 
of the papers. He went so far as to assure media-watchers 
that the newspapers would "even able to cheer on (his rival) 
RS Promotion." Paiboon also promised that there would be no 
restructuring or layoffs at any of the newspapers nor would 
there be any mergers. Political opposition leaders, members 
of civil society and journalists at the two newspapers are 
not convinced, and have lamented the move as further evidence 
of a decline of press freedom in Thailand. Senator Jon 
Ungphakorn summed up the situation, saying "(These 
newspapers) produce outstanding investigative reports on the 
government....But now, that independence is insidiously being 
jeopardized." The Campaign for Media Reform issued a 
statement which noted its "profound concern" regarding the 
situation. 
 
5. (U) Both the Bangkok Post and Matichon are facing 
substantial libel lawsuits from companies affiliated with the 
government (Reftel A). Several of the smaller Thai 
newspapers, including Naeo Na and the Thai Post, are facing 
similar lawsuits. Roby Alampay of the Southeast Asian Press 
Alliance opined that "All of these (libel suits) were serving 
to soften up the press." 
 
6. (U) Matichon founder Khanchai Boonpan and his editorial 
staff have vowed to fight the hostile takeover, which caught 
them very much by surprise. The Nation reported that he had 
secured 31% of shareholder support (NOTE: Khanchai reportedly 
owns 24% of shares. END NOTE) and was considering a number of 
strategies in order to prevent GMM from obtaining majority 
control of the newspaper, including a counterbid. In 
anticipation of a potential bidding war, prices for Matichon 
stocks are rising quickly. 
 
OPPOSITION NOT HAPPY EITHER 
 
7. (C) COMMENT. The opposition Democrat Party (DP) is echoing 
the concerns of press freedom advocates.  DP Secretary 
General Suthep Thaugsuban told Polcouns on September 14 that 
the DP is finding it difficult to get air time and page space 
on Thailand's electronic media and newspapers.  Suthep 
claimed that even media companies that are not controlled 
outright by Thaksin and his family (like iTV and Shincorp) 
are fearful of giving time and space to the opposition, 
fearing that the government will pull lucrative advertising 
contracts.  Suthep complained that he has had to call 
Suranand Vejjajiva, Minister attached to the Prime Minister's 
office, and the person PM Thaksin has put in charge of media 
issues, in an attempt to get air time for DP leader Abhisit 
Vejjajiva's rebuttal of the PM's regular Saturday radio 
broadcasts, with no satisfaction to date. END COMMENT 
ARVIZU