Richard Li appeals PCCW ruling

12 May 2009

PCCW’s chairman Richard Li has decided to contest the ruling of Hong Kong’s Court of Appeal which blocked his proposed buyout of the telco on the grounds that there was ‘manipulation’ of minority shareholders’ votes in gaining approval for the deal. Li’s Singapore-listed holding vehicle, Pacific Century Regional Developments will take the case to the Court of Final Appeal. The move comes after studying a 74-page report released yesterday by the Court of Appeal, which contains a detailed explanation of why the decision was taken to disallow the USD2.1 billion deal on 23 April. The report said there was ‘clear manipulation’ of the shareholder vote on PCCW’s privatisation proposal on 4 February, amounting to ‘buying the votes’, which one of the judges called ‘a form of dishonesty’. The share valuation of the proposal was found by one judge to compare ‘very unfavourably’ with other Hong Kong telecoms stake sales in the last few years, amounting to ‘little more than a confiscation of the independent shareholders’ shares at a depressed price.’ However, one of the three judges contradicted the other two in saying that it was not for the court to decide what was in the shareholders’ best interests.

Hong Kong, HKT (incl. CSL), PCCW Group