Sat, Feb 25, 2006 - Page 11 News List

Chunghwa deal prompts investor ceiling rethink

RULE CHANGE?Overseas investors want a bigger piece of the Chunghwa Telecom pie, and it appears officials are willing to loosen the rules to match other telecoms

By Lisa Wang  /  STAFF REPORTER

The government is considering raising the ceiling on direct investment by foreign investors in the nation's top phone company Chunghwa Telecom Co (中華電信) to cater for their appetite for stock, an official in charge of the case said yesterday.

Holdings in Chunghwa Telecom, a former telecom monopoly, are capped at 40 percent for overseas investors, as mandated by the Telecommunications Act (電信法).

That percentage is much lower than the 49 percent limit for the nation's two major mobile carriers Far EasTone Telecommunications Co (遠傳電信) and Taiwan Mobile Co (台灣大哥大).

"We agree that the limitation [on foreign investment in Chunghwa Telecom] should be the same as that for the private companies. But the rules forbid that," said Tony Teng (鄧添來), director-general of the Department of Posts and Telecommunications under the Ministry of Transportation and Communications.

The government could change the rule to deal with an overseas share sale filed by Taiwan Mobile to the ministry because foreign fund manager holdings are near the legal limit, Teng said.

The ministry currently owns a majority 41.5 percent shareholding in Chunghwa Telecom, the company's chief financial officer, Hank Wang (王漢朝), said last week.

Overseas investors directly hold 39.82 percent of the nation's top phone company, according to statistics from the Taiwan Stock Exchange.

Taiwan Mobile planned to sell its holding of 200 million Chunghwa Telecom shares, or about 2 percent of the outstanding common stock, by the end of this year, Josephine Juan (阮淑祥), a public affairs official at Taiwan Mobile, said yesterday.

Foreign investors yesterday bought a net 1.95 million Chunghwa Telecom shares traded on the Taiwan Stock Exchange.

Shares for Chunghwa Telecom, however, fell 0.84 percent to NT$59.2, after setting a five-month high on Thursday.

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