The National Communications Commission (NCC) is to try to rule on Morgan Stanley Private Equity Asia IV’s (MSPE) bid to acquire multiple system operator China Network Systems (CNS) by the end of this year, commission Chairwoman Nicole Chan (詹婷怡) said yesterday, adding that the buyer has been asked to offer more information about its relationship with Far EasTone Telecommunications Co Ltd (FET).
The legislature’s Transportation Committee questioned Chan for the first time since she took the post on Aug. 1.
The Investment Commission this month suspended a review of MSPE’s planned acquisition of CNS until the NCC re-examines the case, with discussion of the case again dominating a committee question-and-answer session.
FET has been accused of breaching regulations against direct or indirect government investment.
The company says it has followed the law and has only subscribed to corporate bonds issued by a subsidiary of MSPE.
MSPE’s acquisition bid was approved by the Fair Trade Commission and the NCC, leaving Investment Commission approval as the final step to complete the deal.
The Investment Commission sent the case back to the NCC on Wednesday last week, saying that stakeholders involved in the transaction might be in breach of the regulations banning investment by the government, political parties or the military.
Chan dismissed accusations that the NCC had refused to review the case.
She said that the NCC was not “re-examining” the case.
“The commission already approved the transaction before I took office,” Chan said. “Based on the Administrative Procedure Act (行政程序法), the commission can only withdraw ex officio or revoke an administrative deposition.”
Chan said that the NCC would need a powerful explanation to justify withdrawing or revoking a ruling it had already issued.
She told Democratic Progressive Party Legislator Lin Chun-hsien (林俊憲) and New Power Party Legislator Hsu Yung-ming (徐永明) that the current NCC commissioners had reviewed documents seen by previous commissioners before they delivered the ruling and it was found that MSPE did not enclose the appendices of its contract with FET, which would reveal details of the partnership.
The NCC could better determine whether the buyer has breached the regulations after seeing the contract and the appendices, she said.
Lin asked whether the previous commissioners had issued a flawed ruling, as it was made without all the information.
Chan did not comment on the decisions of her predecessors, but said that the NCC would focus on investigating whether FET controls operations at CNS.
The NCC could arrange another administrative hearing of the case if necessary, she said.
Independent Legislator Chao Cheng-yu (趙正宇) and Chinese Nationalist Party (KMT) Legislator Chen Hsuen-sheng (陳雪生) said that the NCC needs to show consistency in the enforcement of government policy.
Chao said that the NCC must not give people the impression that the government intends to make enemies with large corporations and it must follow the Administrative Procedure Act in terms of the time taken to review the case.
Chen said that the previous NCC commissioners had spent more than six months and two hearings to review the case before they issued a ruling and asked whether another review would mean that the decision they made was illegal.
Chen said that the government has shown inconsistency in the enforcement of the law, citing controversy over ride-hailing service Uber as an example.
“The Ministry of Transportation and Communications said that Uber services are illegal,” Chen said. “The Investment Commission even said that Uber should leave Taiwan after repeated breaches, but why did the whole thing change when the Cabinet became involved?”
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