Mon, Mar 03, 2003 - Page 10 News List

Hutchison to limit its Global Crossing role to get bid OK


Hutchison Whampoa Ltd (和計黃浦), as part of a revised bid to win US approval for its purchase of bankrupt Global Crossing Ltd, may agree to limit its role managing the company, people familiar with the matter said.

A US government committee had asked Hutchison, which is controlled by Hong Kong billionaire Li Ka-shing (李嘉誠), and its partner, Singapore Technologies Telemedia Pte, for assurances the acquisition of Global Crossing's fiber-optic network won't compromise national security.

Global Crossing's network transmits communications for US agencies, and the committee had concerns China might interfere with Hutchison's management. Under the existing plan, approved by a bankruptcy judge, the companies would have joint say over management. The parties are now discussing a plan in which Hutchison may act as silent partner, people said.

"The government is in the driver's seat and can say, `We're not going to allow you to take over this company unless you do what we tell you to do,'" said Ivan Eland, a senior fellow at the Independent Institute, an Oakland, California-based policy research organization.

Steve Lipin, a spokesman for Hutchison in the US, said the process ``is highly confidential and therefore we cannot comment. We continue to cooperate with the US government to address any concerns.'' Hutchison and ST Telemedia last year agreed to take a 61.5 percent stake in Global Crossing after the Hamilton, Bermuda-based company emerges from Chapter 11, expected this year.

The Committee on Foreign Investments in the US, which is chaired by representatives of the US Treasury Department and includes members of the State, Commerce and Justice Departments, made the request for revisions. The committee told the companies it needed more evidence the 27-nation fiber-optic network would remain secure if the purchase is completed, people familiar with the matter said earlier this week.

Under a change being discussed, Hutchison would cede its four seats on Global Crossing's board to independent directors, one of the people said.

"We continue to cooperate with regulatory authorities in completing the approval requirements to consummate the transaction," Global Crossing spokeswoman Tisha Kresler said in a statement.

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