Thai govt to seize, silence ITV television

BANGKOK, Mar 6 (Reuters) Thailand's army-backed government said today it would seize ITV, the private television station once owned by ousted Prime Minister Thaksin Shinawatra, but dismayed employees went to court to stop it.

The Central Administrative Court agreed to hear tomorrow a petition by ITV workers seeking to overturn the decision to take the third-most popular television station off the air temporarily.

After insisting the closure would go ahead as planned, the government said it would ask its legal experts to review ITV's handover to the Public Relations Department, part of the Prime Minister's Office.

''If the Council of State says the PMO can assign the Public Relations Department to manage ITV, the department will take over and let ITV resume broadcasting right after the council's decision,'' Dhipawadee Meksawan, a PMO minister, told reporters.

ITV could be back on the air immediately after the council delivered its opinion on Friday, she said.

The run-up to the seizure of ITV and the fate of its 1,010 employees had been front page news for weeks in Thailand since it lost a protracted legal battle against the government.

The firm admitted it had no hope of meeting today's deadline to pay 2.8 billion dollars in fines and outstanding fees after losing a struggle against breach of contract charges.

Last week, the government said ITV, one of only two publicly-listed television stations in Thailand, would fall under the control of state broadcaster MCOT, which operates Channel 9 television, radio stations and the Thai News Agency.

But in an abrupt U-turn, the government said it had decided to hand temporary control of ITV to the PRD.

''After reconsidering this issue, we think the Public Relations Department will be the right agency to manage ITV until we find a new operator,'' Dhipawadee said when she announced the decision to seize the station.

The search for a new operator could take a month, she said.

APOLOGY The government had also promised the station would continue to broadcast while its future was sorted out.

Prime Minister Surayud Chulanont apologised to a group of ITV reporters outside Government House for another change of mind.

''I would like to apologise. I always realise the importance of media. But there were legal issues and I have to stick to the law,'' he said.

The seizure is another setback for Temasek's troubled .8 billion acquisition last year of Thaksin's telecoms group Shin Corp, which holds a 53-percent stake in ITV.

The government says it is negotiating to buy back Shin's satellite unit, which coup leader General Sonthi Boonyaratglin has said he wants back as a matter of national security.

Today's controversial decision, the latest in a series including the imposition of capital controls and a tightening of foreign business ownership laws, has fuelled fears of rising economic nationalism in post-coup Thailand.

''The push to nationalise ITV is an unfortunate precedent that has increased the risk of investing in Thailand,'' Keith Neruda, head of research of UBS Securities in Bangkok.

ITV probably faced bankruptcy and delisting, although the financial impact on Shin Corp would be small because ITV represented less than one percent of Shin's net asset value, analysts said.

ITV shares have been suspended from trading since last Tuesday, when the government announced the deadline.

REUTERS MS KN1859