Hong Kong’s securities regulator has revealed that the Chinese tycoon Li Ruigang is the actual owner of local broadcaster of TVB. The information was apparently hidden from the city’s official broadcasting regulator.

TVB was known to be controlled by its largest shareholder, Young Lion Holdings, which directly owns a 26 per cent stake in the firm. Li’s China Media Capital had invested in Young Lion in 2015 but the actual share structure of Young Lion remained undisclosed.

However, Li’s actual ownership may violate regulators’ rules, which put restrictions on non-Hong Kong residents owning a local broadcaster.

Li Ruigang
Li Ruigang.

Li, dubbed China’s Rupert Murdoch, had been a director of the Shanghai Municipal Committee of Communist Party before running the Shanghai state-owned media empire. He was appointed as vice-chairman of TVB’s board in October last year.

The information of Li’s actual ownership was revealed during hearings by the Securities and Futures Commission (SFC) over TVB’s offer in January to buy back 31.51 per cent of its own shares for HK$4.21 billion.

The hearings found there was a dual shareholding structure at Young Lion. Voting shares represented only 10.61 per cent of Young Lion’s shares, whilst non-voting shares represented 89.39 per cent.

Charles Chan Kwok-keung, a financier and the chairman of TVB’s board, holds 56.51 per cent of the voting shares of Young Lion, whilst Li owns only 32 per cent. However, Chan does not hold any non-voting shares, whilst Li owns 84.6 per cent.

TVB City. Photo: TVB.

Chan’s shares combined only represent six per cent of Young Lion’s shares. Li, meanwhile, owns a 79.01 per cent stake in Young Lion.

Ultimately, TVB board chairman Chan only holds 1.56 per cent of TVB, but board vice-chairman Li owns around 20 per cent of TVB.

Other major shareholders included HTC Corp chairwoman Wang Hsiueh-hong, who owns 3.89 per cent, and Mona Fong Yat-wah and the Shaw Foundation Hong Kong who hold 3.9 per cent.

Shares structure of TVB. Photo: Securities and Futures Commission.

The SFC’s panel, which reviewed TVB’s buyback move, questioned whether Li was the actual owner of China Media Capital. He owns 86.19 per cent of voting shares via a company but the structure of non-voting shares was unclear.

“This indicates the presence of another class of shares in [China Media Capital], a fact that was confirmed at the Panel hearing, and that Mr. Li may not have such a substantial equity interest in CMC and, in turn, in [Young Lion] and TVB,” the Commission said in its ruling.

The panel also cast doubt on whether the Communication Authority had ever received the true information on TVB’s shares structure.

It recommended the SFC give the relevant information to the Communication Authority for review.

Democratic Party lawmaker James To said it was “quite ridiculous” that the SFC was apparently doing the work of the Communication Authority.

He urged the Authority to explain why it did not have knowledge of the shares structure, as it should be revealed whenever there is an application for change in a broadcasters’ shareholding rights.

Secretary for Commerce and Economic Development Gregory So said the Authority has received the information and will review it and seek legal advice.

Kris Cheng is a Hong Kong journalist with an interest in local politics. His work has been featured in Washington Post, Public Radio International, Hong Kong Economic Times and others. He has a BSSc in Sociology from the Chinese University of Hong Kong. Kris is HKFP's Editorial Director.