Satellite operator Asia Broadcast Satellite (ABS) has sought international arbitration over the legal dispute with South Korea’s KT Corp regarding the sale of a satellite in 2010.
In early November 2013, KT dismissed allegations that it sold two…
Satellite operator Asia Broadcast Satellite (ABS) has sought international arbitration over the legal dispute with South Korea’s KT Corp regarding the sale of a satellite in 2010.
In early November 2013, KT dismissed allegations that it sold two decommissioned satellites in 2010 and 2011 to Hong Kong’s ABS below market prices and without seeking government approval, despite the birds being deemed strategic assets.
But a few weeks later, the Korean government reportedly ordered KT to buy back one of the satellites, Mugunghwa-3 (Koreasat-3), as it operates from an orbital slot belonging to the country, as per ITU rules.
Following a disagreement over prices between the two operators, ABS recently brought the case to the International Court of Arbitration (ICA) in New York.
A spokesperson for ABS declined to comment on the situation because of the pending arbitration but added that the company is also “in discussions with KT to commercially resolve the matter”.
The Korean operator was not immediately available for comment. However, a spokesperson for the company previously told SatelliteFinance that, after 12 years, Mugunghwa-2 (Koreasat-2) and Mugunghwa-3 had reached the end of their lifetime and therefore KT assumed that these were no longer national assets requiring government approval.
As for the allegations regarding the sale prices, he said that although one of the satellites was sold for only W500m (US$471,000), the total transaction price, including after-sale technical support and other services, was actually around W20bn (US$18.8m).
The original investment costs for both spacecraft have been estimated at around W452bn (US$425.9m).
Mugunghwa-2 and Mugunghwa-3 were replaced by Mugunghwa-5 and Mugunghwa-6, also known as Koreasat-5 and Koreasat-6. Mugunghwa-2 was then renamed ABS-1A operating at 75E and Mugunghwa-3 became ABS-7 at 116E.
Separately, KT Corp CEO Lee Suk Chae resigned in October last year following corruption allegations.
A probe had been launched after a South Korean civic group reportedly filed charges against the CEO, who was also chairman. The group alleges that Lee made poor investments decisions and sold some of KT’s properties too cheaply, therefore causing W87bn (US$81.8m) in losses to the operator.
