HONG KONG--(Business Wire)--FOX Networks Group Asia (“FOX”) has announced that it has filed legal actions in Hong Kong and Bangkok against the Bangkok Bank Public Company Limited (“Bangkok Bank”) for failing to honor two separate bank guarantees securing payments for distribution of its channels in Thailand by GMM Grammy Public Company Limited (“GMM”) and CTH Public Company Limited (“CTH”), both of which were major operators of pay-TV platforms and the holders of licenses of failed digital television channels in Thailand.
Under separate channel licensing agreements with FOX signed in 2013, GMM and CTH, in aggregate, have obligations to pay FOX a principal amount in excess of US$71 million and interest on late payments. As security for payment of such amounts, the Bangkok Bank issued separate bank guarantees to FOX to guarantee each of GMM’s and CTH’s payment obligations. Since late 2015, Bangkok Bank has failed to comply with its guarantee obligations.
“FOX has a long-standing commitment to the media industry in Thailand and to delivering the highest-quality entertainment and sports programming to our Thai viewers,” said Zubin Gandevia, President, Asia Pacific and Middle East for FOX Networks Group. “It’s a severe disappointment to us that a major Thai bank is failing to honor its guarantees to us, and its consequences go well beyond my own company, especially at a time of heightened sensitivity for investor confidence in Thailand.”
Bangkok Bank is the largest guarantor to Thailand’s digital television operators having provided bank guarantees for 14 of the 24 channels totaling more than US$600 million or approximately 41% of the license fees raised. Three years ago the National Broadcasting and Telecommunications Commission (NBTC) auctioned digital television licenses and raised approximately US$1.46 billion for the state from 24 operators.
“The bank’s credit and its credibility; its entire stock in trade is on the line,” continued Mr Gandevia. “A bank’s letter of guarantee is a financial instrument that is fundamental to the financial and commercial ecosystem of a country, and the belief that such guarantees will be honored is essential to investor confidence in Thai banks. A failure to honor such a guarantee risks putting into question the trustworthiness of the Bangkok Bank.”