The Investment Commission yesterday said it would abide by the legislature’s resolution to suspend its review of Morgan Stanley Private Equity Asia IV’s (MSPE) application to acquire China Network Systems Co (CNS, 中嘉網路) until the new government takes office on May 20.
The commission’s remarks came after the legislature’s economics committee yesterday passed a non-binding resolution requesting the commission to leave the review to the incoming government.
The commission is under the Ministry of Economic Affairs.
Photo: Chen Chih-chu, Taipei Times
The ministry’s “stance is to respect and follow the lawmakers’ request on this matter,” commission executive secretary Emile Chang (張銘斌) told the Taipei Times.
MSPE proposed to acquire a significant stake in local cable TV operator CNS with NT$74.5 billion (US$2.24 billion), which is expected to help Far EasTone Telecommunications Co (遠傳電信), Taiwan’s No. 3 telecom operator, expand its digital foothold in the nation, as the company has a strategic alliance with MSPE.
Under an agreement with MSPE inked in June last year, Far EasTone is to subscribe to non-convertible corporate bonds issued by MSPE’s subsidiary for NT$17.12 billion, while MSPE and several local investors plan to jointly acquire CNS via a newly formed equity fund.
Chang said the commission was not going to review the case in this month’s routine meeting as it is still waiting for the National Communications Commission (NCC) to clarify some questions regarding MSPE’s application.
“There is still a lot of paperwork and things to do before convening an actual review of the CNS deal,” Chang said.
The ministry’s approval is the final step to complete the deal after the acquisition received conditional approval by the Fair Trade Commission in December last year, before transferring the case to the NCC for further review. The NCC in January gave the go-ahead to the deal on condition that Far EasTone should not intervene in the operation of the cable system operator.
During a question-and-answer session at the legislature, Democratic Progressive Party Legislator Lin Chun-hsien (林俊憲) said that as far as he knows, Far EasTone president Yvonne Li (李彬) had met several high-ranking managers at CNS and had started to seek a replacement for the CNS chief executive officer.
In response, Far EasTone said the company had not and has no right to intervene in CNS’ personnel matters.
“Far EasTone only has a creditor and debtor relationship with CNS and will not intervene in its personnel arrangements or operations,” the company said in a statement.
NCC chairperson Howard Shyr (石世豪) yesterday said that the commission can annul its ruling, if it is found that Far EasTone has violated the conditions.
The commission has spent six months reviewing the matter, Shyr said, adding that it neither delayed nor accelerated the review of the deal.
“This is a nation under the rule of law. Any administrative agency must offer legal grounds for why it disapproves or delays issuing a verdict. Litigation could arise whether the administrative agency issues its approval or not,” Shyr said. “The administrative agency would be accused of negligence if it kept delaying reviewing the case just because of doubts.”
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