MAI-listed Solution Corner (1988) Plc (SLC) has promised not to buy any more shares in Nation Multimedia Group Plc (NMG) or become involved in the company's management.
The two sides made a gentleman's agreement after the SLC board on Wednesday approved the purchase of a 12.27% stake in NMG and 225 million warrants (NMG-W1) for 1.042 billion baht.
Along with the NMG investment, SLC would buy 10 million newly issued shares of GMM Grammy Plc at 13.50 baht apiece.
SLC's purchase of the 12.27% stake in NMG sparked an unhappy reaction from NMG management, who expressed concern about interference and conflicts of interest.
A man watches the Nation Channel, operated by Nation Multimedia Group Plc, in which a 12.27% stake has been acquired by Solution Corner (1988) Plc. PANUMAS SANGUANWONG
"We're highly concerned about our media freedom," said Suthichai Yoon, a founder of NMG.
SLC is the parent company of Spring News Corporation, operator of the Spring News Channel.
However, it remains unclear whether the SLC-NMG transaction violates the National Broadcasting and Telecommunications Commission's cross-media holding rules.
Both SLC and NMG have subsidiaries that operate digital TV channels. That means SLC could know business insiders, which may result in unfair competition and eventually violate the NBTC's competition rules.
The NBTC said it still had an ex post facto regulation that could cover the deal and address the problem of market domination.
Analysts ask why SLC would not use the money for the deal to improve Spring News Channel, its own digital station.
"We're not welcoming SLC," said Adisak Limparungpatanakij, president of Nation Broadcasting Corporation Plc.
NMG said it stood ready to oppose any management intervention in order to maintain its media freedom.
Mr Adisak called on SLC to sell its holdings in NMG and said he would find someone to buy those shares.
SLC chief executive Arak Ratboriharn insists purchase of the 12.27% stake in NMG was solely for investment purposes and would create synergy between the two entities in several ways.
"It's a pure investment," he said. "The media should pool their resources to produce a variety of content and reduce costs."
Spring News is already spending 600 million baht to build its new headquarters and studios, Mr Arak said.
He said he spoke with both Grammy and NMG executives before the deals were announced.
The NMG shares were bought by SLC through the bourse, with Thanachart Bank and NMG director Sermsin Samalapha thought to be the possible sellers.
SLC shares closed yesterday on the MAI at 12 satang, up one satang, in trade worth 30.9 million baht.
NMG closed on the SET at 1.81 baht, up two satang, in trade worth 70.4 million baht.