Jun 19 2013 - 09:12

Two court cases, a prince, a former Lebanese warlord and the battle for LBC

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Two court cases, a prince, a former Lebanese warlord and the battle for LBC
Lebanon News

In an interview with Campaign Middle East Magazine, CEO of LBC International (LBCI) Pierre El Daher reveals for the first time the background of the two cases facing the media corporation.      

At the center of two controversial legal battles – one against Saudi Prince Al Waleed Bin Talal, the other with Lebanese Forces leader Samir Geagea, LBCI stands and braces the battles. Until last year El Daher and Al Waleed were business partners at Lebanese Media Holdings (LMH), with Al Waleed owning an 85 per cent stake.            

When Al Waleed had bought the majority share in 2008, his capital increase was intended to help bolster the success of LBC SAT and its production arm PAC.
At the time El Daher, who had been largely responsible for the development of LBC following the imprisonment of Geagea in 1994, assumed the partnership would blossom into a stronger and more refined broadcasting group.                      

But after an impromptu boardroom meeting, the relationship turned sour and left channels and employees being shifted from pillar to post.           

According to El Daher, the war of words started when LBC SAT and PAC were moved to Al Waleed’s Rotana Group, with the Choueiri Group dropped from media sales duties and sales shifting in-house to Rotana Media Services (RMS). “The main point of issue was the revenues,” says El Daher.            

“The prince insisted on moving LBC SAT to RMS. I told him this would be suicidal. I disapproved. We had a board meeting and I said no, but he owns 85 per cent of the Lebanese Media Holdings.          

He wanted to make the move because he wanted them all under one group – under RMS. When the prince had taken on the majority share I thought it was a great idea. I thought it would take the channels to the next level. The capital increase was for major improvement to production but he made the decision to move LBC SAT after ousting the Choueiri Group in December 2008 and by 2009 and the results were disastrous. Our revenue went down by 50 per cent. In January 2012 he had decided to stop our partnership. He said there were many reasons but the main reason was because he was losing money, which was because of the decision to get rid of Choueiri.”         

LBCI’s claims in the arbitration case include a request that “the Rotana Group pay PAC the outstanding monies owed to PAC Ltd under the Cooperation and Service Agreement dated 30 September 2009 but which the Rotana group had refused to pay, making PAC unable to meet its obligations under the Cooperation and Service Agreement.            

LBCI’s claims also included ownership and broadcast rights over certain LBC marks and the entitlement over equipment and library components.       

When the closure of PAC was first announced in Beirut last spring, a statement by LMH said that it was ending operations of the company due to losses sustained after the refusal of LBCI to pay it its dues.        

In November last year former PAC employees held a protest in Beirut, demanding that they receive all compensation due to them following the closure.             

Addressing El Daher, the employees, who blamed him for not informing them about the company’s decision in advance, accused him of “throwing more than 150 families in the streets”.                     

A further protest in December last year was cancelled after a settlement was reached with LBCI. “The former employees have not been paid for a year. And suppliers are waiting in line too,” says El Daher. “I told them [the workers] it was not my issue anymore.”              

It is also claimed that Rotana TV owes a total of $44 million to workers who were laid off and suppliers left out of pocket.         

The Rotana Group declined to comment when contacted by Campaign. “I feel sorry for them and what they are having to go through,” Daher says.                       

These are employees who we worked closely with for 20 years or more. We have rehired 250 of those workers with LBC International. Others are based in other companies and found new jobs and about 50 are without work right now.” PAC is liquidated and 397 staff are laid off. The majority are re-hired by LBCI but 45 dismissed workers are still unemployed with most still fighting for severance pay 2013 LBCI and the Rotana Group are set to battle it out in a Paris court of arbitration.            

LBCI battles Lebanese Forces:

And then there’s Geagea, who was released from prison in 2005 after serving 11 years for crimes committed during the country’s civil war.            

He has initiated proceedings claiming ownership of LBCI.             

LBC was originally launched by the Lebanese Forces in August 1985 and Geagea alleges that El Daher breached his management responsibility of LBC during Geagea’s 11 years of incarceration.          

Since Geagea’s release the Lebanese Forces have claimed the company still belongs to them, although no conclusion is in sight. El Daher says: “He [Geagea] wants to be part of the political scene and wanted more time on the channel – I said LBC couldn’t be a mouthpiece for him.               

When I refused there was a question of whether he owned the channel. I contest this and I said let’s go to court. It’s politically driven. I am amazed by politicians making false allegations. Samir Geagea is one of them. He said in an interview that the case could take three years. It’s been five years just to debate about the issue.
A decision is yet to be made on whether a trial will be fixed over Geagea’s legal dispute with El Daher regarding ownership of LBCI. We are doing programs in partnership with other TV channels, MBC in Dubai, CBC and Al Hayat. I’m going to continue with LBCI – I’m quite happy with what we’re doing.” He says the channel is “doing very well at the moment” but won’t reveal its revenue.          

“We are not a public company, it’s private but we’re doing well.” El Daher also remains tight lipped about his business plan with shareholders, which won’t be revealed until the end of the year. “There will be major changes.       

The internet will be playing a completely different role compared to what it was like in 2008.”

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