Australian May Lose Media Empire
IN a major blow to Australian businessman Alan Bond's reputation and corporate interests, the Australia Broadcasting Tribunal has found Mr. Bond unfit to hold a broadcasting license. The June 26 finding, which followed an 18-month investigation, could force Bond Media Ltd. to sell one of the largest television and radio networks in the nation. It would be comparable in United States terms to the Federal Communications Commission telling General Electric Company to divest the National Broadcasting Company because of the character of the chairman of GE.
The government tribunal can revoke or suspend a broadcasting license. But it has not yet set the penalty. That decision could occur within a month.
In a statement, Bond said his media firm was not for sale. An appeal and further court hearings were likely. But analysts reckon that sooner or later Bond will have to sell his media interests with a book value of more than $1 billion (Australian; US$770 million).
``There will probably be a forced sale. The question is, what would he get for it? He and other shareholders would probably lose 30 to 35 percent in a forced sale,'' says Brad Orgill, a research analyst at Potter Partners, a brokerage house.
The tribunal rejected Bond's offer to restructure management of the media company to distance himself from its operations. ``These undertakings do not address the concerns we have about Mr. Bond's behavior,'' the Tribunal statement said.
The tribunal cited five points of impropriety that led to its decision. One dealt with a threat by Bond to use his television staff to investigate a business competitor and put the findings on television. And four points surrounded Bond's A$400,000 (US$308,000) defamation payment more than a year ago to the then premier of the state of Queensland, Sir Joh Bjelke-Petersen. Questions arose over whether the payment was for defamation in a report by a Brisbane television station that Bond owned, or a bribe to do business in the state. The tribunal found it improper that Bond made so large a payment, tried to disguise the amount, and deliberately gave false and misleading evidence about the payment.
In justifying its finding, the tribunal noted that ``one of the great risks for a person who controls such significant resources as television and radio networks is to misuse them.'' And regarding the defamation payment, the tribunal stated Bond's ``deceit .... driven by expediency'' was ``improper behavior of a more fundamental and damaging nature.''
Bond is described by friends and foes as a gutsy, high-flying entrepreneur. Bond Media owns the top-rated ``Nine Network'' television stations in Sydney, Melbourne, and Perth. It also owns the Australian Sky Channel satellite pay-television system, and a string of radio stations. It holds a 10 percent stake in Worldwide Television News Corporation, a US-based media firm, and a 50 percent stake in Media New Guinea, a Papua, New Guinea, broadcasting firm.
If Bond is forced to sell out, it would be a ``very important'' loss to his corporate empire, but not critical, Mr. Orgill says.
Bond's image has slipped considerably from the days when he was admired and respected as the man who brought the America's Cup down under. Last year, he was criticized for supporting Chilean President Pinochet when Bond purchased a controlling stake in Chile's telephone system. A few months ago, a Bond tax-avoidance scheme in the Cook Islands was the subject of a national television show. This prompted a federal taxation committee probe.
Market confidence in Bond has also been shaken by his unsuccessful takeover attempt of Tiny Rowland's Lonrho PLC, a British trading company. Rowland claimed Bond was wallowing in nearly A$12 billion (US$9.24 billion) of debt. Analysts do not know how much debt Bond's overall organization carries, but its flagship Bond Corporation Holdings is estimated as having over A$6 billion (US$4.62 billion) in debt, with an equity base of just under A$3 billion (US$2.31 billion).
Now, a legal battle is brewing between Bond and the Australian Stock Exchange over the reluctance of Bond Corporation Holdings to give the stock market adequate details of a proposed corporate restructuring. Bond recently embarked on an asset sales program designed to shrink the organization's debt load.