Hong Kong police investigate takeover bid for telecom giant PCCW

We do not comment on market rumours, and we do not comment on [their] accuracy or otherwise Anita Choi, PCCW. (REUTERS)

Hong Kong police are probing tycoon Richard Li over his failed bid to buy out telecommunications giant PCCW, a legal source and press reports said yesterday.

Investigators last week raided several homes and offices in a bid to collect evidence following a court ruling last year that a shareholder vote on the controversial deal was rigged, the source said on condition of anonymity. Police searched the offices and three homes of of Li, the Chairman of PCCW and the son of Hong Kong's richest man Li Ka-shing, local press reported.

The long-running saga has gripped the financial hub as it pits one of the city's wealthiest families against company shareholders and Hong Kong's market watchdog the Securities and Futures Commission (SFC).

PCCW, Hong Kong's largest telecoms company, declined to comment.

"We do not comment on market rumours, and we do not comment on [their] accuracy or otherwise," spokeswoman Anita Choi said.

Li's lawyer Martin Rogers told the South China Morning Post that he did not believe Li was "the target of any investigation" but had pledged to "co-operate fully with any investigation".

Police and the SFC also declined comment.

Li had sought to buy out PCCW through his investment vehicle Pacific Century Regional Developments (PCRD) and with his partner China Unicom, and offered shareholders HK$4.50 (Dh2.12) per share.

But the bid was fiercely opposed by a group of minority shareholders who had seen the value of their shares plummet from more than $100 at the height of the tech-stock boom in 2000.

The offer was accepted following a shareholder vote in February last year. But the SFC immediately sought a judgement on its legality, claiming it had been manipulated. The vote was upheld by the High Court in April last year but the SFC lodged an appeal and won.

Li later announced that the takeover plan was scrapped. The judges in the SFC appeal ruled that the vote was unfair as agents at Fortis Insurance Company (Asia), a Hong Kong insurer formerly controlled by Li's investment vehicle, were given stocks in return for their approval of the takeover.

Li Ka-shing, the 81-year-old head of conglomerate Cheung Kong Holdings, remains the financial hub's richest person with a $21.3 billion (Dh78.17bn) fortune, according to the annual list compiled by Forbes business magazine. Forbes in November ranked Li as the 16th wealthiest person in the world when his net worth was $16.2bn.

Li had fared particularly well from Hong Kong's soaring property prices.

He was the only one of the city's tycoons to make the top 25 world ranking list in November, which placed Microsoft founder Bill Gates as the globe's richest person with a $40bn fortune.

 

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