Murdoch Hastens to Reassure Mahathir
International Herald Tribune
August 5, 1993
Kevin Murphy 

Responding to criticism by the Malaysian prime minister, Rupert Murdoch's News Corp. scurried Wednesday to reassure Asians that its latest acquisition, the STAR-TV satellite television network, would not become a vehicle for outside interference in Asian affairs.

The Sydney-based company also sought a meeting with the prime minister, Mahathir bin Mohamad.

After agreeing last month to pay $525 million for a 63.6 percent stake in HutchVision Ltd., the parent company of Hong Kong-based STAR-TV, which is the dominant satellite broadcaster in Asia, News Corp. is discovering that government resistance to Western domination of the mass media is on the rise in Asia.

Adding to News Corp.'s difficulties, the newly acquired broadcast concern confirmed Wednesday that its chief executive, Julian Mounter, had resigned after Mr. Murdoch refused to allow the STAR-TV head to report to him directly.

Both events signal a difficult start for News Corp.'s expensive foray into Asia.

In a statement released from Los Angeles, the worldwide broadcasting, media and publishing company sought to reassure Asian governments and Mr. Mahathir, who on Tuesday lamented STAR-TV's sale to Western interests, of its cultural sensitivity.

STAR-TV, whose five 24-hour channels can be seen in 38 countries, is at the center of a spirited competition among Western media and entertainment groups to develop the television market in Asia, where two-thirds of the world's potential viewers live.

Among its major competitors is a consortium including Hong Kong's Television Broadcasts Ltd., the American news channel CNN International, the sports channel ESPN Asia, the American movie channel Home Box Office and the Australian government-controlled entertainment channel ATVI.

"We would not presume to intrude into the domestic affairs of any country," the News Corp. statement said. "We intend to make STAR-TV a service which Asian families can enjoy in their homes and a service which governments in the region will find both friendly and useful," it said, adding that News Corp. was seeking an opportunity to address Mr. Mahathir's "reservations."

Mr. Mahathir's attack, which included an accusation that Western news organizations promoted unrest in Asia, coincided with two other clashes between Western media and Asian governments.

Singapore this week told the London-based newsmagazine The Economist that its circulation in that country would be capped at its current level of 7,500 and that the magazine would have to post a bond of 200,000 Singapore dollars ($123,900), after The Economist apparently was not quick enough in publishing a government reply to a letter from Singapore's best-known opposition politician.

In India, meanwhile, the government proposed a law restricting Western television broadcasts.

Mr. Murdoch "is certainly going to have to move more carefully than he does in Europe and the United States, where he is operating in his own Western culture," Brian Jeffries, editor of Asia Pacific Space Report, told Bloomberg Business News.

"But I don't think he is stupid enough to tread roughshod over the sensitivities of the countries involved," Mr. Jeffries said. Mr. Murdoch, a native of Australia, is a naturalized American citizen.

Because Malaysia bans individuals from owning satellite receiving dishes, STAR-TV and other international broadcasts are not received in Malaysia. STAR-TV expects that restriction to be eased to allow its programs to be seen in Malaysian hotels, however.

But Mr. Mahathir's attack and a drop in staff morale at STAR-TV brought on by Mr. Mounter's hasty exit could complicate News Corp.'s tasks of dealing with program suppliers and establishing a subscription viewing business.

"I wouldn't be very surprised if some people decided their career path no longer included coming to Hutchison House every day," one employee who requested anonymity said, referring to STAR-TV's offices in the headquarters building of the Hutchison Whampoa conglomerate. Hutchison Whampoa and the family of its chairman, Li Ka-shing, retained a 36.4 percent stake in STAR-TV.

"My departure will do no harm to the company," said Mr. Mounter, who would not disclose the severance terms in his contract or whether he had accepted a job with a rival media group. "I'm sure STAR-TV will go ahead as before."

STAR-TV executives close to Mr. Mounter said he had asked to report directly to Mr. Murdoch.

Copyright © 2006 The International Herald Tribune