Pro-Beijing tycoons circle Taiwan Media

For Asia Sentinel www.asiasentinel.com

Press freedom under threat

There are strong indications that the pro-Beijing rice cracker and media king Tsai Eng-meng is emerging from behind the scenes as a major player seeking to take over the Taiwan operations of the media empire of Hong Kong media mogul Jimmy Lai, a vociferous critic of the Chinese Communist Party.

Several weeks ago, Lai signed a memorandum of understanding with a Taiwanese-Singaporean consortium to sell his Next Media Group’s Taiwanese units for US$600 million. Reports are now emerging that a major chunk of the sum may have come from Tsai, the head of the Want Want-China Times Group and Lai’s nemesis. Tsai is a controversial figure who has made no secret of his strong pro-China stance and once said he had come to truly admire the CCP for having killed very few pro-democracy protesters in the 1989 Tiananmen crackdown massacre.

If allegations of Tsai’s involvement are true, most of Taiwan’s media landscape would be in the hands of pro-Beijing tycoons as others have moved into the field. Tsai isn’t the only Taiwanese tycoon with a clear political stance now playing a role in the island’s media market. Last year, Cher Wang, chairwoman of Taiwan’s smartphone maker HTC, together with investment partners, purchased a controlling stake of 26 percent in Television Broadcasts Ltd (TVB), Hong Kong’s dominant broadcaster, which owns TVBS, the Taiwan cable TV network which runs the hugely popular 24-hour news channel TVBS News.

There are concerns that the moguls wouldn’t hesitate to field their newspapers, magazines and TV stations to steer public opinion to Beijing’s liking on issues concerning China.

The four media outlets Lai is selling to the group, headed by Chinatrust Charity Foundation chairman Jeffrey Koo Jr, are the Apple Daily, the Sharp Daily, Next Magazine and Next TV. Apple Daily has a market share of close to 30 percent with more than 2 million readers, making it at least the second-biggest daily in Taiwan if not the biggest. Lai’s weekly Next Magazine, with its hallmark investigative stories, has been taking on corrupt politicians regardless party affiliation, becoming a major heavyweight force for reform on the island.

Although Lai’s Taiwan media business has always been considered profitable, there have been good economic reasons for his sudden pull-out. Mark Simon, a top official with Lai’s Next Media in Hong Kong, declined comment on any aspects of the sale, or to whom.

“Apple and Next were quite successful, but print media outlets must team up with digital ones to develop sustainably in the long-term,” Hu Sheng-Cheng, an economist at Academia Sincia, Taiwan’s most renowned research institution, told Asia Sentinel.

“Lai would have had to invest big amid fierce competition to handle the digital sector. Instead, he now withdraws from the Taiwanese market, gets a good price for it, and funnels the money into his Hong Kong businesses,” Hu said.

After the announcement of the sale, Lai swore that he made very sure that no penny of the funding would come from Want Want’s Tsai. Tsai made his fortune with dozens of factories churning out rice crackers in China. According to what Tsai says in interviews, he came to truly admire the CCP for having killed very few pro-democracy protesters in the 1989 Tiananmen crackdown massacre. When in 2008 Taiwan’s China Times Group came up for sale – a deal that included the TV stations CtiTV and China Television as well as China Times Weekly magazine, the Want Daily and the China Times, the latter of which is Taiwan’s third biggest daily – Lai bid but lost out at the last minute when Tsai offered more money. Allegations have persisted that Beijing paid the bill to keep Lai from increasing his influence on Taiwanese public opinion.

What happened after the China Times sale is considered to have been dismal. After Tsai took over, the Chinese-language daily’s political stance turned sharply pro-Beijing. Inserts raised eyebrows with their distinctive CCP-layout style, allegedly paid for by Beijing, typically praising economic developments in Chinese provinces, while flatteringly introducing officials there.

Tsai’s Want Want-China Times Group earlier this year gained media regulators’ conditional approval to take over cable TV operator China Network Systems (CNS). The staggering US$2.52 billion bid – the largest media purchase in recent years in Asia, according to the Financial Times – will merge Tsai’s group with Taiwan’s second-largest multiple cable service owner, which has about 1.1 million subscribers. The International Federation of Journalists says that expansion alone means Tsai would be able to control a third of Taiwan’s media, including 23 percent of all cable TV subscribers.

There appears to be little doubt that the tycoons will meddle in Taiwan’s politics. On the eve of Taiwan’s January last presidential and legislative elections, a handful of influential business figures including HTC’s Wang came out with an urgent endorsement of the so-called 1992 Consensus, a CCP-Kuomintang (KMT) doctrine that enables Taipei to portray China as the Republic of China but which in China is interchangeable with the One-China principle. The tycoons’ timely call was widely assessed as having tipped the electoral balance so that the Beijing-friendly KMT won.

While Wang’s excursion onto the political stage was still tolerable in a country that guarantees the right of free speech and whose media is consistently ranked as one of the freest from government interference in Asia, many of Tsai’s recent moves can only be described as brutal. Earlier this year, when faced with significant opposition to his plan to acquire cable operator CNS, his media outlets launched salvoes of non-stop attacks against an anti-unification lawmaker as well as an academic whom the choleric Tsai perceived as having got in his way.

For instance, the China Times ran a full-page report falsely accusing Academia Sinica associate research fellow Huang Kuo-chang of paying students to protest against the Want Want-CNS deal. After that episode, China Times editors and reporters resigned in droves or applied for early retirement, claiming that their stories were rewritten without any changes to the bylines so as to profoundly discredit Huang.

“China Times completely lost integrity in its attacks on Huang,” said former CtiTV general manager Chen Shou-kuo, one of Tsai’s employees who resigned. “Tsai was said to be furious … and even complained that the attacks were not harsh enough.”

That Tsai’s attacks aimed to create a climate of fear among Taiwan’s academic, journalistic and political circles, making them think twice before speaking out against him, is clear. It has also since become evident that Tsai has ambitions to meddle directly in big politics. When Taiwan’s coast guard fought a high-profile water cannon duel with Japanese patrol ships near the disputed Diaoyu/Senkaku islands in September, Tsai played a major role in the incident, which strained Taipei-Tokyo ties, much to Beijing’s liking.

Tsai donated US$170,000 for diesel fuel for the Taiwanese fishing boats which were escorted by the coast guard as they tried to enter Japan’s exclusive economic zone (EEZ) in protest over Japan’s “nationalization” of the islands.

There is more at stake than curtailing press freedom, critics say. Tsai’s hand in the media business has downgraded the quality of the Chinese language media as a whole.

“The China Times used to be the best newspaper in the Chinese language,” said Steve Tsang, director of the University of Nottingham’s China Policy Institute. “It is now a commercial product that is more focused on sensationalism than on high quality journalism, and a certain political stance is also clear. The expansion of Tsai’s control over Taiwan’s media is very bad news for Taiwan and for journalistic standards in the Chinese language world.”

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