The privatization of Hong Kong telecoms firm PCCW (電訊盈科) will be further delayed after a judge yesterday granted the territory’s securities watchdog more time to investigate possible vote-rigging.
Judge Susan Kwan (關淑馨) said that the Securities and Futures Commission (SFC), which is looking into allegations that the shareholder vote to take the firm into private hands was fixed, had 21 days to file evidence.
Yesterday’s hearing was originally expected to rubber stamp the HK$16 billion (US$2 billion) privatization bid and PCCW had hoped to delist from Hong Kong’s stock exchange today.
Kwan said any future hearing would now come around the end of next month or early April, the latest delay in the three-year campaign by PCCW chairman Richard Li (李澤楷) to take the firm private.
She said any disgruntled creditors or shareholders of the territory’s largest landline operator would also be heard at a future hearing and also had 21 days to file any evidence.
“If you are creditors or shareholders of the company, you have the right to appear at the substantive hearing if you have any objections to the scheme,” she told the packed public gallery at Hong Kong’s High Court.
A large group of shareholders are furious at the deal. Shares in PCCW have plummeted from more than HK$130 in 2000 at the height of the tech-stock boom to less than HK$4.
At a meeting earlier this month, PCCW shareholders approved a bid by Li and his partner China Netcom (中國網通) to take the company private by offering minority shareholders HK$4.50 a share.
But the decision was immediately overshadowed by the SFC’s seizure of voting records from the meeting and the announcement it was beginning a probe.
Shareholder activist David Webb prompted the SFC investigation when he said he had received an anonymous tip-off claiming hundreds of insurance sales agents for one firm were each offered one lot, or 1,000 shares, in PCCW in return for voting in favor of the buyout bid.
PCCW has denied wrongdoing in the matter.
Winston Poon (潘松輝), the SFC lawyer, told the High Court that the full investigation would take much longer than three weeks.
“That would take months or … years. We will do our best to try to present a fair picture [in the time given],” he told the judge.
Jonathan Harris, representing PCCW, said they were against any unnecessary delay, saying it would be adverse to the interest of the company’s investors.