The Southern Development Authority, major shareholder of Comet Cable, has warned it will withdraw the company’s broadcast rights, unless royalties owed since 1997, are paid up.
The Southern Development Authority (SDA) owns the broadcast license for Ruhuna 2001 Multivision (Pvt) Limited, used to provide pay television service Comet Cable in Sri Lanka.
The SDA is also a 50 percent shareholder in Multivision, with the balance held by Australian company Charmway International, which manages the company.
The authority says it has not received royalty dues from its foreign partners for use of the license, as agreed in a joint venture agreement signed in 1997. The royalties were to be used to develop the south of the island.
"Charmway International has been given one month’s notice to pay 12 million dollars in due investment, allocate funds for the proposed ‘Ruhuna 2001 studios’ company and pay 65 million rupees in estimated royalties to SDA or undergo cancellation of the agreement," Ruwan Kasiwaththa, Director policy planning SDA told LBO.
"After completing all the legalities, we can withdraw the broadcasting license." Kasiwaththa says Charmway has also not provided the SDA with detailed accounts for many years.
"They provided accounts for 2003. The accounts for that year forecasts 65 million rupees in royalties up to 2005."
The SDA says Multivision has paid only seven million rupees in royalties to date and claim that they have little say in how the company is run due to only one slot on the board of directors.
"Accordingly, the SDA has demanded payment and Multivision has continuously failed to make any payments," the authority said in a public notice on Friday.
The public notice also restrained the sale, mortgage, transfer or alienation of assets of the pay television company, until all overdue amounts are settled.
"Under these circumstances, the SDA has demanded the assets of Multivision should not be sold, transferred, mortgaged or alienated by its directors or the management until the aforesaid royalty fees is recovered by the SDA."
Officials from Multivision were not available for comment.
Comet Cable has an 18,000 strong customer base and is one of the oldest pay television companies in Sri Lanka with 18 paid channels ranging from movies, sports, fashion to music.
The service is currently available only in the capital Colombo and suburbs.
December 15 (LBO)