SET-listed GMM Grammy Plc is worried that GMM B, a subsidiary of CTH and the broadcast rights holder for Uefa Euro 2016 in Thailand, may lack the funds to win the rights to broadcast the 2018 World Cup European qualifying rounds.
If GMM B is unable to pay Uefa the broadcast rights fee for the qualifying rounds by Sept 1, it risks losing the match signals to broadcast in Thailand.
Grammy yesterday filed a lawsuit asking the Central Bankruptcy Court to withdraw its ruling on April 7, which allowed BEC Multimedia Co, the digital TV subsidiary of BEC World Plc, to directly pay US$5.63 million to Wichai Thongtang, founder of CTH, by Sept 1. A further $1.36 million would go to GMM B for cash flow.
BEC Multimedia together with Bangkok Entertainment Co, another subsidiary of Channel 3's BEC World, agreed to pay $7 million to GMM B for the Euro 2016 sub-licensing rights.
Channel 3 is now the broadcaster of the Euro 2016 tournament, whose final match will take place early morning next Monday.
GMM B has been undergoing business rehabilitation for a certain period. The company had poor liquidity and told the court that it was necessary to borrow money from Mr Wichai in April this year.
GMM B used to be a Grammy subsidiary but was sold to CTH in July 2014.
Grammy said in its lawsuit that it is very concerned that if GMM B allows BEC Multimedia to pay back Mr Wichai, GMM B will not have sufficient funds to pay Uefa for the broadcast rights fee for the European qualifying rounds.
"This will risk GMM B losing the match signals for the qualifying rounds, and Thai audiences will also lose the chance to watch the football games," the lawsuit said.
Grammy questioned whether Mr Wichai, who is the major shareholder of CTH, knew the conditions when he bought GMM B that the company had issues regarding the qualifying rounds.
"GMM B should use the money it will get from BEC Multimedia to pay Uefa first. The payment to Mr Vichai should not happen on the same day it is due to pay Uefa on Sept 1," Grammy said.
BEC Multimedia is also the broadcaster of the European qualifying rounds. It received the sub-licensing rights from GMM B.
CTH faces financial problems. It has cut its content supply to the C-band satellite system and will cut its content for the KU-band satellite system on Aug 1.