INDEPENDENT Newspapers may seek compensation for losses at its Princes Holdings associate because of the failure of various governments "to police the enforcement" of exclusive cable TV licences, according to chairman, Dr Tony O'Reilly.
Princes Holdings had lost £21 million so far in providing a service for 125,000 homes in its licence areas, he told shareholders in the group's annual report. Seven years ago, Princes Holdings got 17 "exclusive licences" to supply cable services for certain regions across the State.
With international partners, Telecommunications Corporation and UIH of Colorado, Independent invested £65 million in Princes, he explained. Independent owns 50 per cent of the cable TV company.
Because various governments did not police the enforcement of the licences, there was "a proliferation of illegal operators, some of whom do not pay taxes, performing rights or VAT and constitute a direct confrontation to the direct authorities who granted the licences in the first place".
Overall, the news from Ireland was good in 1996 with the exception of the question of the MMDS licences, Dr O'Reilly said. But libel laws here "remain as archaic as ever", he added, stating that he hoped the Government would address the issue "firmly and with courage".
In Britain, the group was actively pursuing opportunities within the greater London area.
In Australia, the Pan TV pay channel formed with SBS, the government's special broadcasting service, and Channel 7 may be profitable in 1997, according to Dr O'Reilly. "If it is, it will certainly be a first in Australia" he told shareholders. Forecasting that the Australian economy would pick up this year, he said group results would reflect this upswing in economic activity.
South Africa remains the most turbulent and exciting of all our investments". The group is looking at the potential of radio TV and cellular telephones for new business ventures in this region and hoped to have "something meaningful" to report in the next annual report. "South Africa will have its inevitably difficult days ahead, but the excitement, the curiosity and the desire to succeed is palpable under the national leadership of Nelson Mandela, and we believe our group will play a very important part in the future development of this extraordinary country and continent."
The acquisition of 85.6 per cent of Wilson & Horton in New Zealand was "the most important acquisition in the history of Independent Newspapers". This year, the operation will contribute more than 40 per cent of group operating profits and would be our principal profit centre". In the long term, the operation was "well positioned to take advantage of the burgeoning Asian market, particularly Japan".
The annual report shows that nine executive directors shared remuneration of £2,259,000 in 1996, an average of £251,000 each and an increase of 21 per cent on the 1995 average package of £207,727. But the figure was inflated in 1995 by a compensation payment for loss of office of £227,000. When this is stripped out, the average remuneration rose by 34 per cent.
Average basic salaries rose by 34 per cent to £153.444. Average bonuses payments rose by 44 per cent to £44,889 in a year when group pre-tax profits rose by 47 per cent to £73.5 million.
Thirteen non-executive directors, including Dr O'Reilly, shared annual remuneration of £417,000 in 1996, an average package of £32,077 each. This was an increase of 24 per cent on the average package of £25,857 in 1995 when 14 directors shared £362,000.
At the end of 1996, Dr O'Reilly owned 66,539,610 million Independent shares or 27 per cent of the group. He had options to acquire 3,524,603 shares at an average price of 186.41p a share.
Subsidiaries acquired during 1996 contributed £13.6 million to group net operating cash flow.
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