(Associated Press via NewsEdge) Hong Kong lawmakers plan to hold a hearing next month on Richard Li's decision to sell most of his stake in local phone operator PCCW to financier Francis Leung, a legislator said.
Lawmaker Albert Cheng said he and his colleagues were concerned whether the transaction would hurt minority shareholders' interests, whether Leung was backed by other investors who might create a telecom monopoly, and if the deal was influenced by political pressure from China.
The announcement of the share sale came after two foreign groups, Australia's Macquarie Bank and US investment firm Texas Pacific Group and its Asia-focused unit Newbridge, had bid for PCCW's core telecom and media assets.
Chinese state-owned phone operator China Network Communications, which owns 20% of PCCW, opposes any asset sale, saying it doesn't want to see telecom infrastructure on Chinese soil falling into foreign hands.
Instead Li, the younger son of Hong Kong's richest man Li Ka-shing, said he planned to sell 23% of his 26% stake in PCCW to Leung for HK$9.16 billion ($1.2 billion).
Li also offered to pay a special dividend to minority shareholders out of his own pocket that some believed was too small. Critics said shareholders would have been better off with an asset sale.
There is also speculation that Leung is backed by the elder Li.
Cheng said lawmakers planned to invite local financial officials and telecom regulators to attend the planned joint hearing by the legislature's information technology and financial affairs panels, which would not be held until at least August 4.
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