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Fri, Jul 18, 2003 - Page 12 News List

Singapore asks US to allow its bid for Global Crossing Ltd

BLOOMBERG

Singapore Prime Minister Goh Chok Tong wrote to US Vice President Dick Cheney, urging the US to allow Singapore Technolo-gies Telemedia Pte to buy Global Crossing Ltd, said people familiar with the matter.

The letter was delivered to Cheney on Monday, after the Pentagon told the US Department of Treasury it objected to the acquisition. The Pentagon is concerned about foreign ownership of Global Crossing because the company's fiber-optic network provides the US with commercial and military Internet links.

A spokeswoman for Cheney, Jennifer Millerwise, confirmed the vice president's office received a letter though wouldn't confirm its contents.

Singapore's government, owner of ST Telemedia, is weighing in to help salvage the US$250 million transaction. ST Telemedia would buy 61.5 percent of Global Crossing and take control of its 100,000-mile fiber-optic network, which spans 27 countries. The Pentagon said that would threaten the national security.

"Singapore has a vested interest in this going through, so it's reasonable they're going to put some pressure on the US government," said Igor Volshteyn, an analyst at broker Tejas Securities Group. With the Pentagon opposed, "ultimately, national security interests are probably going to outweigh economic interests."

A panel of US government departments, including the US Department of Defense, has been reviewing the purchase and will decide this week whether to approve it or extend the review for a further 45 days. A decision would then be made by US President George W. Bush.

The letter to Cheney was sent to the relevant government agencies, Millerwise said.

The panel, known as the Committee on Foreign Investments in the US, or CFIUS, earlier this year expressed concern about ST Telemedia's Hong Kong-based partner Hutchison Whampoa Ltd and its links to China. Hutchison decided to pull out of the bid because of the extra scrutiny, leaving ST Telemedia to pursue Global Crossing alone.

Some US officials had indicated that ST Telemedia had a good chance of winning approval for its bid because of its close ties with the US

Singapore is one of Washington's closest allies in Asia, including working with the US in the war against terrorism and providing port access to the Pacific fleet.

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