The broadcasting regulator will sue Bangkok Bank (BBL), the guarantor of cash-strapped Thai TV Co, after the bank failed to show up and pay 1.78 billion baht on behalf of the digital TV operator on April 18.
Sombat Leelapata, acting deputy secretary-general of the National Broadcasting and Telecommunications Commission (NBTC), said it would collect documents related to the bank guarantee issued by BBL for Thai TV.
"We're waiting to pursue the legal process against BBL. We hope the bank will come out and clear up the payment for Thai TV before we sue it," he said.
Ailing Thai TV placed its bank guarantee worth a combined 1.97 billion baht with the NBTC when it was officially awarded two digital TV licences for Loca children's and Thai TV news channels in early 2014.
The licence for the news channel is valued at 1.32 billion baht and the Loca children's channel licence is 648 million baht.
Last month, the Central Administrative Court dismissed an injunction request by Thai TV to protect its bank guarantee from being seized by the NBTC after the TV channel operator defaulted on the second batch of auction fee payments.
A source close to the issue said Thai TV is likely to face a complicated legal battle after it did not allow the NBTC to claim the bank guarantee. BBL did not pay the NBTC the guaranteed money on the regulator's deadline on April 18.
Thai TV defaulted on the second instalment of auction fees worth 288 million baht last May, saying it could not make the payment because it faced huge losses of 300 million baht from operating the two channels. It later claimed losses of 1 billion baht this year.
The law requires BBL to receive permission from Thai TV before paying a guarantor, and Thai TV declined to authorise any payments.
Its two digital TV licences have been revoked since Feb 4. Thai TV went off the air for both channels on Dec 1. It could not find a strategic partner to help shore up operations.
If the NBTC sues Thai TV and BBL, the source said Thai TV would be the first defendant and BBL the second.
Recently a BBL executive said it would study the legal issues before making a guarantee payment to the regulator.
Meanwhile, Thai TV and seven other digital TV operators filed a lawsuit against the NBTC, blaming the regulator for failing to facilitate a smooth digital TV transition.
BBL, the country's largest lender by total assets, has still classified Thai TV as a performing borrower but set aside a full loan-loss provision to be prudent.
For the first quarter this year, the bank's provisions for loan losses rose to 3.64 billion baht, up 22.3% year-on-year. The bank's non-performing loans totalled 61.84 billion baht, up 30.3% year-on-year.