The prolonged impact of Covid-19 and historical fraud issues have forced shareholders of New Zealand's largest Chinese Language media company to sell business assets and liquidate the organisation.
A liquidators' report from Grant Thornton last week shows shareholders reached an agreement to liquidate World TV Limited (WTV), Asian Communications Media House Limited (ACOM), Chinese Voice Broadcasting Limited (CVB) and the radio company FM104.2 Limited.
The organisations operated under the overarching banner of the World TV Group, founded in June 2000.
Over the past 20 years, the company has expanded its scope to include two TV channels and two radio brands to service New Zealand's Chinese community.
Grant Thornton's report explains the impact of Covid-19 over the past 12 months has seen demand for advertising decrease significantly. These pressures combined with "the historical fraud issues of former directors" led to a decision by shareholders to sell the bulk of the business assets and wind up the companies.
The report lists company shareholder Fu-Nu Tsai as a secured creditor, owed $1.78 million by WTV.
The preferential creditors include debt of $212,000 to the Inland Revenue Department as well as a preferential GST of $234,000.
Unsecured creditors are owed a total of $1.4m across the WTV and CVB arms of the business.
The known creditors include Sky Network Television, Watercare, Genesis Energy, Sargent Lawyers, among a number of others.
The liquidators' report says it is not possible at this stage to estimate the outcome of the liquidation or the quantum of any returns to investors.
The financials across the group list total assets in excess of $4.19m, but inter-company debts and company shares make up the lion's share of this figure. The liquidators note that intercompany debts are spread across the four businesses and that collectability is unknown at this stage and also that there are likely to be zero realisations from the company shares valued at $1.2m.
While Covid-19 has placed enormous pressure on the organisation, the financial troubles at the firm predate the start of the pandemic.
The Herald understands the liquidation is the final step taken by the main shareholder, Fu-nu Tsai, who has poured millions into the business.
It's understood Tsai has taken the business assets and is now running them under a new company called Best News Entertainment Limited, which has allowed for the various media properties to remain on air.
Best News general manager Jody Chang told the Herald in this is a "new beginning" for an operation that's "extremely valuable" to the Chinese community in New Zealand.
Chang noted that it had not been easy to get to this point, detailing internal struggles that had undermined the business in recent years.
Chang said that in 2016 there was "a coup" within the business that saw a group of shareholders, led by convicted fraudster Henry Ho take control of the organisation.
Ho is a controversial figure in the business community having last year been released from prison after serving two years for fraudulently securing about $8.8m from ANZ to finance his company International View Limited (IVL).
Chang tells the Herald that the battle between the shareholders continued into 2017.
"I was instructed to do whatever it takes (legally) to get the control of the company back," Chang told the Herald.
"So, we took it back in July 2017. However, upon on regaining the company, we found out that World TV Limited is now in a big financial hole, with millions of debt. The only way which we would be able to have a chance to save the company was for our biggest shareholder, Fu-Nu Tsai, to lend a large sum of money to the company."
According to Chang, Tsai's investment saw the debts wiped clean, but the troubles continued from this point.
"In 2018, when the company was finally starting to breakeven again, a legal case from the wrongdoings of Henry Ho from 2016 came and took over $1.5 million off us. Once again, we had to try and recover from it."
Chang explains that the follow-on impact of Covid-19 left Tsai with no choice but to try recoup the debt from World TV or take over the business and try to operate it on her own.
She ultimately opted for the latter.