Hong Kong -- China Entertainment TV (CETV) founder Robert
Chua has issued a stark warning to would-be pay TV providers in China, after admitting
that his channel was close to folding.
Chua warned that it is vital that foreign businesses
thoroughly check the legal and financial standing of the mainland Chinese partners that
they are forced to seek before entering into any agreements with them.
One-half of CETV's staff of 200 was laid off Jan. 1,
after the channel failed to get the financial backing that it was promised by a consortium
of mainland Chinese companies. Chua warned that the channel will close at the end of this
month unless a white knight steps in.
The investors agreed to buy 80 percent of CETV for $US34.3
million, and to provide a minimum of $US40 million of operating capital over the next five
years.
But CETV has not received any money, and Chua singled out
the de facto leader of the consortium -- Kan Shu-tsang, chairman of China Asia TV Arts
Center, which was to have taken 30 percent -- for reneging on his contractual obligations.
Chua also repeated his threat to sue members of the consortium should CETV collapse.
Sun Ji Hui, general manager of Beijing Mega Fortune -- the
largest investor, with 40 percent -- has pledged to find a new investor to keep CETV
going.
