Government to install limit on Chunghwa shares

21 Jan 2003

The Taiwanese parliament is considering legislation which would allow the government to stop rival telecoms companies from taking influential stakes in national telecoms operator Chunghwa Telecom [2412ta.TW]. According to the FT, the Ministry of Communications in Taipei has joined forces with Taiwan’s Fair Trade Commission to draw up rules aimed at preventing a repeat of last month’s sale of 6% of Chunghwa’s shares to one of its fiercest rivals, Taiwan Cellular. That company is now eyeing a seat on Chunghwa’s board through which it hopes to influence decisions regarding infrastructure access and other issues.

The shares were bought by Taiwan Cellular as part of a 13.5% tranche sold by auction after several failed attempts by the government to attract investors. Taipei officials are hoping to privatise over half of Chunghwa by the end of the year via a series of share sales and auctions. The planned new law will mean any rival telecoms operator will need approval from the government to buy stakes in Chunghwa over a certain limit, the level of which has still to be decided.