US embassy cable - 05BANGKOK6090

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