The Vancouver Sun from Vancouver, British Columbia, Canada • 35

13 (JS INE SS I I II- VANCOLVl SI X. I SIWV. MAY 25. 200 I Entrepreneur finds niche in multicultural media Suit filed against ex-NYSE chairman BY BEN WHITE PROFILE I James Ho saw the market potential in ethnic programming. Now he has a TV and radio station to prove it S4 NEW YORK New York Attorney-General Eliot L.

Spitzer Monday filed a lawsuit against former New York Stock Exchange chairman Dick Grasso, demanding that Grasso return a substantial portion of the $139.5 million US paid to him by the exchange last year, a source said. Also named in the civil suit was the New York Stock Exchange and Kenneth Langone, former chairman of the exchange's compensation com- i 4, mittee and a close friend of Grasso's. A spokesman for Grasso declined to comment, but Langone issued this statement: "These were honest, diligent and sound com BY DAVID BAINES VANCOUVER SUN Spitzer am fortunate to be in this business. It fell in my lap," says James Ho, sole owner of mul BILL KEAYVANCOUVER SUN FILES James Ho owns the ethnic radio station CHMB AM 1320 and is minority shareholder of the ethnic TV station Channel M. pensation decisions that were thoroughly researched and, most importantly, supported by 100 per cent of the board.

We all had access to that same information, beginning, middle and end and that's why singling people out in this case is so obviously mis guided. I am 1 standing up for my convictions and firmly behind those decisions and so if Mr. Spitzer wants to grand-stand in the press, he's doing it on a very shaky soapbox." television stations across Canada, most notably the chain's crown jewel, BCTV. WIC had been sold to Can-West Global and Reitmayer was ready for a job change: "Doug said we would have a free hand to do what we wanted and to do quality, which was important to us," Reitmayer recalls. Reitmayer was given a 10-per-cent equity interest.

The remaining 90 per cent is split equally among the five original partners. The group purchased a five-storey building at 88 West Pender for $3.3 million and converted it to state-of the art studio and production facilities. About a dozen people were lured away from rival Vancouver-based Fairchild Television and TalentVision, two premi Grasso um pay-TV stations that mainly serve the Lower Mainland's Chinese pop-ulation in Cantonese and Mandarin. On June 27, 2003, the ticultural radio station CHMB AM 1320 and the driving force behind multicultural television station MVBC, better known as Channel M. This is not quite true.

Ho's evolution from cotton grader to commodities trader to media proprietor is not as serendipitous as he claims. It is the product of a methodical, brick-by-brick approach to business, and to life in general. "I have found him to be a very meticulous individual," says partner Joe Segal, one of the city's most prominent businessmen. "He pays a lot of attention to detail. He is completely dedicated to being associated with a successful venture." Ho, 47, was born in Taiwan, the fourth in a brood of five boys.

His father ran a successful conglomerate that was involved in retailing, manufacturing, transportation, trading and restaurants. "I was more fortunate than a lot of people," Ho acknowledges. "But as a kid, I didn't realize that." Being born into affluence does not necessarily mean kid-glove treatment. At the age of 13, his father sent him to Hong Kong to attend school. Two years later, he joined his brother John, three years his senior, in Vancouver where he attend-ed St.

Thomas Aquinas in North Vancouver and later Magee secondary school in Vancouver. Asked to list the advantages and disadvantages of living abroad without parental supervision, he says: "The pros are simple: freedom and independence. The cons are very simple, too: outside influence, which is usually negative. There are a lot of temptations out there, a lot of people who try to entice you into bad areas. I think my brother kept a fairly close eye on me." Upon graduation, Ho enrolled at SFU in commerce and economics, but he lost interest in his third year and dropped out.

As textiles was an important component of his father's business, he found himself working as a cotton grader, first with the California Cotton Company and later as a consultant for the family business. This job took him to cotton-growing companies all over the world, from India to El Salvador. "I saw a lot of poor people. It opened my eyes. I realized how fortunate I was." In 1985, he returned to Vancouver, where he had maintained a residence, and joined Reitmayer his brother John's commodities trading business, West Coast Commodities.

His brother eventually moved to Hong Kong and he became sole owner of the firm, which now operates as Quantum Financial Services. He also operates a foreign exchange business, called RCG Forex, out of the same building. Both grew into money-spinners, generating more than enough cash flow to comfortably support Emily, his wife of 22 years, and his three sons, aged 16 to 21. In the early 1990s, however, he was approached by the owners of a radio program called Overseas Chinese Voice, which had been in existence since 1973. The program had leased broadcast time from CJVB AM 1470, which at the time was the city's only multicultural station.

CJVB's owners had agreed to sell out to the Fairchild Group and the program owners began looking for another broadcast vehicle, so they approached Ho for help. "I told them that we have to get a (broadcast) licence. Otherwise we will forever be at everybody's mercy." So in 1993, Ho acquired CHQM AM 1320 from CHUM and obtained a licence to oper-ate multicultural station CHMB. The CRTC stipulated programming in a minimum of 12 languages, but the station voluntarily upped that to 14. Those languages include Pun-jabi, Japanese, Greek and Dutch, but Ho says the "bread and butter" is Cantonese and Mandarin.

The company derives the bulk of its revenues (about 85 per cent) from advertising revenues, but it also organizes and runs special events, such as Chinese New Year at various venues in Vancouver and Richmond and the annual beauty contest at Parker Place in Richmond. Ho will not reveal the station's annual revenues, but he does say that, according to the Radio Marketing Bureau in Ottawa, his station ranks third of eight Vancouver-area AM radio stations in terms of revenues. That includes CKNW, CKWX, CISLand CFUN. Audience ratings are not conducted for multicultural stations, so IIo is not sure where his station stands in relation to his main competition, Fairchild's CJVB AM 1470 One of the losing applicants was Rogers Communications, which had specifically proposed a multicultural channel. Ho saw the need for such a channel.

"That put the seed in my head," he recalls. In 2000, the CRTC sent out a request for proposals for a multicultural channel. Ho wanted to make a bid, but he knew he would need strong partners. He approached Bob Lee, head of Prospero Realty and a former governor and chancellor of the University of B.C., and Geoffrey Lau, head of Golden Capital Securities. They, in turn, approached Segal, president of Kingswood Capital Corp.

and a former Simon Fraser University chancellor. Segal recognized the market potential. At least 40 per cent of Vancouver's population was ethnic, mainly Chinese, and growing. "It is the right product at the right time," he says. Currently, Richmond's population is 39-per-cent Chinese.

In Vancouver, that figure is 30 per cent, in Burnaby it's 26 per cent and Coquitlam 18 per cent. "It adds up to a staggering number of people," Ho says. The fifth piece of the puzzle a person with actual television experience was completed when the group's communications lawyer in Ottawa contacted Doug Holtby, former president of WIC Western International Communications whose properties included BCTV and CKNW radio, at the time the unchallenged leaders in their fields. "I knew of these people," said Holtby of his future partners. "It's hard not to live in Vancouver and not know of them." Together, they created Mul-tivan Broadcast Corp.

(or Channel for short) with Ho as its president. The CRTC hearing was held in October 2001. The competition boiled down to Channel and Rogers. Channel won. The licence was granted on Valentine's Day 2002.

The final piece of the puzzle, somebody to actually build and operate the station, was completed in 2002. Holtby approached Art Reit-mayer, a broadcast wun-derkind who, while sfill in his 30s, was appointed president of WIC Television, which made him responsible for 10 and FM 96.1. Ho says the media business has a "special appeal" to him: "It's a very different type of appeal. Of all my businesses, Quantum has presented the most opportunity to make money. But that's just money.

"The media business is much different. If you treat it as just another business, then you are in the wrong business. There's passion and influence. A lot of people who listen to our DJs believe every single word they say. We are affecting their buying habits, their views toward politics, education, law and order.

"But we have to be entertaining as well. People have so much pressure at work, they need a laugh or two. And we have a commitment to charitable work." The feature wall of the station's office on West 73rd Avenue is filled with plaques from non-profit groups expressing gratitude for the station's assistance. Among them is a commendation from the Tzu Chi Foundation for organizing a $3-million fund-raising drive in the wake of the September 1999 earthquake in Taiwan. Even though the radio station is private, Ho like many of his listeners views it as a public utility.

"The airwave is owned by the public. All I have is a seven-year contract to manage the airwave. That is something I have to remember and respect." He says his ownership of the radio station, which employs 28 people, has "definitely" raised his profile. "I have always gotten attention, ever since I was young, but recognition is very different. It's a very satisfying feeling when people say, 'James, we appreciate the programs and what it has done for His profile was viewed as an asset in 1996 when CHUM applied for a television licence in Vancouver and asked Ho to lend his moral support.

He agreed, but CHUM ultimately lost to VTV (now CTV channel 9). "That was a learning process," he says. In 1998, he would go through the process again when CIlUM's Moses Zaimer asked him to once again provide his moral support in a bid for a television licence. This time, everybody lost: the CRTC decided not to award a licence to any of the applicants. Spitzer argued that Grasso's pay violated New York state laws governing not-for-profit organizations.

State law requires that pay for executives at not-for-profit organizations be "reasonable" and "commensurate with services performed." Spitzer's suit asks the court to rescind Grasso's pay and instead set a "reasonable" amount. Grasso's contracts were approved by boards of directors that included executives from firms that the NYSE regulates, which critics said was a clear conflict of interest. The critics said the exchange under Grasso was a poor regulator, failing to uncover allegedly biased stock research by Wall Street analysts, among other things. In a press release posted on his Web site Monday afternoon, Spitzer noted the conflict of interest issue. In addition, he said the board was misled about Grasso's contract.

That allegation, he said, is bolstered by testimony from Frank Z. Ashen, former head of human resources at the Exchange. Ashen admitted to the attorney general's office that he provided "incomplete, inaccurate and misleading" information to the board, according to Spitzer's statement. For example, it says, the board did not know about an $18 million bonus awarded to Grasso for 1999-2001. The statement also alleges that a consulting firm that prepared the analysis of Grasso's compensation package, Mercer Human Resource Consulting has told Spitzer's office that the report had "inaccuracies and omissions." In a settlement with his office, Spitzer said, Ashen has agreed to pay the NYSE $1.3 million and Mercer Human Resources will return its payment from the NYSE in 2003.

The lawsuit against Grasso comes after attempts by Spitzer to settle the suit failed when Grasso declined to return any of the $139.5 million, saying he had done nothing wrong. Washington Post channel made its debut on cable 8. Half of its programming is in English and the other half is split among 22 "third languages," most notably Cantonese and Mandarin. The group estimates its total capital outlay will reach $30 million before the station, which now employs 90 people, breaks even. (The break-even point was originally expected to take four years to reach, but is now expected take much less.) He says the business challenge is to get advertisers who patronize conventional stations to recognize that the ethnic community offers unique marketing opportunities.

But the station has been broadcasting for only eight months. Ho sees immense opportunity in the burgeoning ethnic community, and offers a bit of advice to mainstream media who want to tap into it: "People are aware that things are changing, but not everyone is aware of the source of that change. You have to find out where it is coming from, and then go out and explore it. You have to get out of your comfortable box." dbalnvstpngjcanwcstxom k- 9 mow SOONER. News Hour with Tony Parsons lyT'r II BCTV News on Global' 0-00.