The S&F law blog

Chairman Richard Li

HONG KONG: The court will rule on the PCCW privatization case next Monday, High Court Judge Susan Kwan said after the second day of hearings into the matter.

PCCW Chairman Richard Li offered shareholders a buyout price of HK$4.2 per share to privatize the Hong Kong-based telecom carrier last December. The offer price was later increased to HK$4.5 due to opposition from minority shareholders. The Securities and Futures Commission (SFC) began to investigate the transaction after alleged vote rigging took place at the PCCW shareholder meeting on Feb 4.

Earlier, the SFC revealed in court that PCRD Deputy Chairman Francis Yuen had contacted Fortis’ Regional Head Lam Hau-wah before the key vote on the PCCW privatization plan on Feb 4.

SFC lawyer Winston Poon told the court yesterday that the regulator found that Yuen had talked to Lam thrice on the phone before he acquired PCCW shares from the market on Jan 5.

When SFC quizzed Yuen and Lam, both claimed that they had forgotten the contents of their phone conversations, he said.

The link-up between Yuen and Lam was found to be suspicious given that the latter used to earlier assist Yuen at Fortis Insurance. However, they deliberately played down the relationship during the inquiry, Poon said.

Benjamin Yu, the lawyer who represented PCCW’s major shareholder Starvest, earlier questioned the SFC investigation of Lam and Yuen, saying the probe was biased and incomplete. However, Poon did not agree with the contention.

Source: China Daily

http://www.chinadaily.com.cn/cndy/2009-04/03/content_7645272.htm