Far EasTone Telecommunication’s (FET) board has approved a plan for the Taiwanese company to sell new shares to mainland-based China Mobile, in an unusual deal that looks unlikely to proceed in the near-term. The board originally approved a plan in April 2009 to sell up to 444.34 million new shares to China Mobile for up to TWD17.77 billion (USD567 million), giving the world’s largest cellco by subscribers a 12% stake. However, the deal stalled because Taiwan’s government does not allow Chinese firms to invest in its telecoms sector. Far EasTone’s board had to re-approve the plan for the private placement with China Mobile ‘since the one-year period for private placement will soon expire,’ the firm said.
Taiwan and China are currently negotiating a free-trade pact that would permanently remove many of the remaining barriers to mutual trade and investment, after having already expanded economic ties in recent years after decades of hostility. The planned deal has faced strong opposition from some people in Taiwan who worry that Taiwan’s growing economic interaction with China gives Beijing political leverage over the island.