Full and Fair Disclosure: A Study of TTV, CTV and CTS Stockshares Going Public


Mei-Man Chang


The monopoly power of the three VHF TV stations in Taiwan (TTV, CTV, CTS) has always been criticized. The Article is focused on their capital structure controlled mainly by the government, the ru ling party–Kuomintang (KMT) and the Ministry of National Defense. Recently, TTV, CTV and CTS have start to issue their stocks to certain private parties.

In order to prevent the public investors from the uncertain risk, “full and fair disclosure” is the best way to ensure a fair relation be tween TV Companies and public investors. It is also important to pro vide public investors with a reasonable disclosure of risk and return. So the study attempts to introduce the procedures and then presents the important viewpoints, as follows:

(1) According to Sec. 12 of The Broadcasting Act, every two years, the TV station license should be renewed, the rule is out of date and not economic, so the term of license must be extended longer than two years.

(2) The accounting system in Taiwan is also unfamiliar with in tangible assets of TV company, because it includes so many concepts, such as the license terms, the operating schedules and program ratings, intellectual property rights, etc. The information must also be full and fair disclosure.

(3) Besides, the law and regulation in Taiwan is also set to pre vent inequitable and unfair practices on such exchanges and mar kets. Sec.36 (2)(2) of The Stock Securities and Exchange Act rules that “The major and influential events of the company should be known by the public.” Such as the staff rearrangement, the financial statement of the TV station, etc. All of the information must be offered by the three TV companies to the public.