Murky rumours surround PCCW trading suspension

2 Feb 2009

Reuters reports that trading in PCCW’s shares was suspended this morning after a shareholder activist alleged that stakes were offered to insurance agents as a reward for supporting a buyout offer from the Hong Kong telco’s chairman Richard Li and major shareholder China Netcom. PCCW said in a statement that trading was suspended ‘due to speculative press reports over the past few days which the company believes may potentially be price sensitive.’ On 15 January regulators were informed of the alleged scheme, which had surfaced via an anonymous e-mail. The alleged plot envisages hundreds of Fortis Insurance sales agents being offered 1,000 PCCW shares in return for signing a proxy form to support a USD2.2 billion privatisation plan, with each getting USD577 in the event of the buyout succeeding. Last November, Li and Netcom offered to take PCCW private for HKD15.94 billion (USD2.06 billion), or HKD4.20 per share, before sweetening the offer in December to HKD4.50 per share. PCCW’s minority shareholders will meet on Wednesday to discuss the buyout offer.

Hong Kong, PCCW Group