Paiboon Damrongchaitham, a Thai entertainment magnate, has backed away from his hostile takeover bid for the independent Matichon newspaper, yielding to an intense public outcry over what is seen as political interference in the media.
After growing calls for a boycott of CDs and videos produced by GMM Grammy, his music company, Mr Paiboon, a close friend of Thaksin Shinawatra, Thailand's prime minister, agreed to sell some of Grammy's newly acquired shares in Matichon to Kanchai Boonpan, the newspaper's founding editor.
The transaction, expected to take place soon, will reduce Grammy's stake in the respected publishing company from 32 per cent to 20 per cent, while raising Mr Kanchai's stake from 24 per cent to 36 per cent. Mr Kanchai will be required to follow up with his own offer for the company's remaining shares.
The deal, announced just days after Grammy's takeover bid was made public, is expected to defuse the furore over what many had seen as an attempt to muzzle a newspaper that had been an open forum for dissenting voices and a constant thorn in the side of Mr Thaksin.
"Basically, Grammy has been scared away," Korn Chatikavanij, a member of parliament for the opposition Democrat party, said. "I don't think they anticipated the huge public outcry.
"Grammy's own business is dependent on public goodwill and I think that was cause enough for them to rethink their strategy," Mr Korn said.
Matichon, Thailand's fourth-largest daily newspaper, its sister business newspaper, and its weekly news magazine, have long been at the forefront of serious political and investigative journalism in Thailand, with a reputation for integrity and incisive analysis.
In 2000, Matichon's affiliated business paper exposed how Mr Thaksin, a billionaire telecoms tycoon before he turned to politics, had failed to declare publicly corporate shares held in the name of his domestic servants. The publications have maintained their edge during a period in which state-controlled television and radio channels have been purged of most critical voices and privately owned newspapers have toned down their coverage in response to political and commercial pressure.
The news that Mr Paiboon had spent Bt733.2m ($17.9m) buying a 32 per cent stake in the respected publishing house from minority shareholders, and would tender to take full control of the company, provoked an uproar among democracy advocates, media watchdogs, and academics.
Despite Grammy's protestations that it would not interfere editorially, critics feared a repeat of what happened when Shin Corp, the company founded by Mr Thaksin and still controlled by his family, acquired iTV the formerly independent television channel. Once a respected news and public affairs channel, iTV became filled with lifestyle and celebrity programmes.
Stock analysts were also unconvinced that Grammy's success at manufacturing bubble-gum pop stars, and their records, was a logical fit with serious daily journalism.
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