Immediately after the resignation of deputy premier Wissanu Krea-ngam from the caretaker Cabinet, Prime Minister Thaksin Shinawatra appointed Newin Chidchob to look after all the affairs at Government House. Newin's first comment was that he would look into the iTV case, after the Central Administrative Court ruled that iTV must pay Bt75.96 billion to the Office of the PM for alleged breaches of its broadcasting contract.

Peeraphan Prempooti, former head of the Anti-Money Laundering Office, has also been appointed as adviser to the prime minister. His assignment is to look into all aspects of the broadcast contract between iTV and the PM's Office. The Cabinet appointed Peeraphan on Tuesday as under-secretary at the Office of the PM to give him full authority.

With the country caught in a major political crisis, why does the caretaker government focus on a seemingly minor issue like iTV?

iTV is part of Shin Corp, formerly owned by the Shinawatra and Damapong families. Investment bankers have suggested it's highly likely that Temasek, the new owner of the station, had a guarantee clause in its Shin Corp buy-out to cover a situation in which one or more of the Shin subsidiaries face financial or legal claims.

"It's a standard practice that, in a huge merger-and-acquisition deal like this, there must be an ongoing contractual arrangement over any legal suits pending. The guarantee clause is to protect the buyer from any damages in the event of, in legal terms, any material adverse change," said an investment banker.

An expert in international law also said that as standard international practice, the seller must sign to confirm that the assets sold to the buyer do not have any legal obligations. If there are risks of such obligations, then there must be an agreement that the buyer can claim damages from the seller.

"This is a done deal. It can't be scrapped. Yet there is a possibility that the buyer can re-evaluate the deal. The Bt49.25-per-share Shin Corp deal may be revised because it does not reflect the real value of Shin Corp as a result of damages to iTV," he said.

However, very few know the details of any ongoing contractual arrangement between the Shinawatra and Damapong families and Temasek.

"Still, we suspect that a guarantee clause must exist, otherwise the prime minister would not have sent his own people to look after iTV as a special case," the legal expert said.

Meanwhile, Rongphol Charoenphanthu, new secretary-general to the Cabinet, said yesterday the PM's Office would soon discuss with the Attorney General's Office if penalties imposed on iTV should be calculated from the day the Central Administrative Court issued the ruling, May 9. If the Attorney General's Office agrees with the PM's Office proposal, this would reduce the penalties iTV should pay for reprogramming that occurred without approval from the PM's Office.

The Attorney General's Office decided earlier that penalties should be imposed from January 2004, when iTV reshuffled its programmes after the arbitration panel's ruling. That resulted in the hefty penalties of Bt76 billion.

"So far, iTV has been honest. It had the right to follow the arbitration panel ruling," Rongphol said.

Siriporn Chanjindamanee

The Nation