US embassy cable - 05BANGKOK6095

UNCLAS SECTION 01 OF 02 BANGKOK 006095 
 
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 The Bangkok Post (Ref A). Press 
freedom advocates, academics and the political 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 acquired Matichon shares back to the paper  founder. 
The Bangkok Post has yet to 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 rare victory for 
civil society was tempered somewhat as a popular political TV 
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 Thaksin 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 Post (Ref A). He also announced plans to 
take over an additional 43 percent of the Matichon Group, 
eventually hoping to control 100 percent of company 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 
editorial independence. Thai civil society leaders immediately 
cried foul, recalling 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  founder 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 potentially wield a fair amount of influence. For this 
reason, many are calling on Paiboon to divest himself completely 
of shares in both newspapers to prove 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 of 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 Matichon, the Thai- and 
English-language editorial pages were filled with articles 
hailing Grammy's retreat as a victory for Thai civil society and 
a warning that businesses with political connections were 
interested in controlling 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, the Bangkok Post issue was often 
relegated to background material, even when they staged a rally 
at Government House on September 20. On September 22, 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 is 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 the cancellation of popular political television 
program "Muang Thai Rai Sapdaa" (Thailand Weekly) hosted by 
respected journalist and businessman Sondhi Limthongkul, and a 
former loyal supporter of the PM. The state-run Channel 9 said 
the show had been canceled because Sondhi had made inappropriate 
remarks with regard to the royal family. In his program, Mr. 
Sondhi implied on numerous occasions that the King was angry 
with the TRT government for exercising powers which are 
constitutionally reserved to the crown, in the ongoing 
controversy over the designation of a national Auditor-General 
(Ref B). The program had been on the air over a year, and 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, the state regulating body, for 
one baht (less than three cents) for criminal and civil libel, 
and planned to file another for lost wages. Several Democrat 
Party MPs, led by Sathit Wongnongtoey, filed a petition with the 
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 denied any involvement in last week's incidents. He 
admitted that he knew Paiboon 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 as a normal 
stock transaction, and added that he did not devote himself to 
any business dealings since he became Prime Minister. Regarding 
his former ally Sondhi, the PM said that his administration had 
not been involved in 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