The operator of TV Channel 7 is preparing to seek an injunction against the digital-TV licence auction should regulators disqualify it from bidding.
NBTC secretary-general Thakorn Tantasit checks the readiness of the digital-TV auction computer system on Friday.
An executive at Bangkok Broadcasting and Television Co (BBTV) said the firm will file a suit against the National Broadcasting and Telecommunications Commission (NBTC) on the grounds that the latter's auction rules are unfair.
"If the NBTC disqualifies us, we'll appeal to the Administrative Court for an injunction," said the source.
The problem faced by BBTV stems from an internal dispute between two of its majority shareholders.
To prevent price collusion in the auction, the NBTC prohibits cross-holding of more than 10% of shares among bidders vying in the same licence categories.
Surang Prempree, BBTV's former managing director, left the company amid much publicity last year after 32 years of service because her contract had not been renewed. The 71-year-old executive was reportedly at odds with Krit Ratanarak, another majority shareholder and board member.
Together with her husband, Mrs Surang, a niece of one of BBTV's founders, still holds a 21% stake in the company.
She subsequently became the major shareholder of Chan 25 Co Ltd, a much smaller and little-known company that also plans to join the auction.
Mrs Surang's lawyer said earlier that she would not sell the BBTV stake.
BBTV has bought bidding documents for variety high-definition (HD) and standard-definition channels, while Chan 25 will likely bid for a variety HD channel.
Under NBTC conflict-of-interest rules, both companies could be disqualified from the auction, as Mrs Surang holds majority stakes in both firms. For Chan 25, the damage would be minimal since it is a much smaller and relatively unknown company.
But a lot is at stake for BBTV. With its top rating and 46 years in business, disqualification would be devastating.
The BBTV source claims the cross-holding rule has simply become a tool for one player to block another.
The NBTC is aware of this but has decided to proceed without doing anything about it, said the source.
However, Col Natee Sukonrat, chairman of the NBTC's broadcasting committee, earlier said bidders' qualifications would be considered strictly by the rules with no revisions to accommodate any specific operator.
Chan 25 also plans to appeal to the NBTC and related agencies if it is disqualified.
The cross-holding rule was imposed in accordance with a Prime Minister's Office regulation regarding government e-auctions. Also, the rule requires the largest shareholder of each bidder to hold at least 25% of all shares.
For a listed company, the Stock Exchange of Thailand requires the largest shareholder of entity holding stake at least 10%.
These rules have drawn strong criticism by potential bidders, and legal experts say they do not suit current business circumstances.
Potential bidders must submit their documents to the NBTC today and tomorrow, after which they will be under a 60-day silent period until the auction in mid-December.