Thai private television station ITV, sold by ousted Prime Minister Thaksin Shinawatra's family to Singapore last year, will stay on the air during a government takeover, officials said on Wednesday.
"The broadcast will continue after midnight," Public Relations Department chief Pramoj Rathavinij told Reuters after government lawyers backed the department's takeover of ITV, which will operate under a new name, TITV.
Employees had launched a last-ditch court action after the government ordered ITV off the air at midnight local time on Wednesday for failing to pay US$2.8 billion in fines and outstanding fees after losing a long legal battle.
With ITV surviving the threat of closure the court action appeared moot and the announcement drew cheers from hundreds of ITV employees and supporters outside its Bangkok offices.
The firm, one of only two private stations in Thailand, had aired highlight reels for most of the day and announcers wore black shirts in protest.
Founded in 1995, the station quickly earned a reputation for independence and reports that exposed government corruption.
But critics said it became a Thaksin mouthpiece after Shin Corp, the telecommunications giant he founded, took a controlling stake in 2001, the year he became prime minister.
"This is a legal dispute, not a media intervention," Takerng Somsup, head of the Thai Broadcast Journalists Association, said.
Analysts said the seizure appeared aimed partly at putting pressure on Singapore state investment firm Temasek, which paid $3.8 billion last year for Shin Corp, holder of a 53% stake in ITV.
"Nationalizing ITV reflects the fact that the military was not comfortable with a broadcaster under foreign control," a telecoms analyst at a foreign brokerage said.
"It can be used as a tool to change how people think," he added. "The next target will be satellites."
Bangkok is investigating whether the Shin sale broke foreign ownership laws limiting outsiders to a maximum 49% holding in a Thai company.
Coup leader General Sonthi Boonyaratglin set off a diplomatic spat when he accused Singapore of eavesdropping on Thai communications, a charge Shin officials deny. He also demanded the return of four Shin satellites as a matter of national security.
A Thai newspaper reported on Wednesday that Temasek, which has seen its Shin investment halved in value since the sale in January 2006, was in talks with two Thai investors about selling its stake in Shin Satellite.
Temasek declined to comment on the report.
The ITV affair was widely deemed another poorly thought-out move by the army-backed government, accused of a series of blunders, including botched capital controls in December.
Prime Minister Surayud Chulanont had promised that the station would stay open while the government sought a new operator.
On Tuesday, he apologized for breaking his word.
Dhipawadee Meksawan, a cabinet minister overseeing the case, stunned everyone by saying the Public Relations Department (PRD) would manage ITV, not the state-run broadcaster MCOT as announced a month ago.
Hours later, Dhipawadee said government legal experts would have to review the legality of using the PRD and on Wednesday they said there was no legal problem.
The English-language Nation newspaper asked why the legalities had not been sorted out before the decision was taken, but added: "Considering the performance of the government in the past five months, this is not a surprise."