Far EasTone president Jan Nilsson has downplayed reports that China Mobile is not allowed to invest in the Taiwan operator.
On Thursday, executive secretary of the Investment Commission, Fan Liang-tung, said the telecoms sector was not open to mainland investment, the official China News Agency reported Thursday.
As such, Fan said China Mobile could not proceed with its plans to buy a 12% stake in Far EasTone for NT$17.7 billion ($554.1 million).
But says while that is correct “for now,” he says the comments are “nothing new.”
“Telecoms…is not yet on the [Taiwan government’s] agenda,” he told telecomasia.net.
“This has been the situation for a year now. It’s a case that everything that is not explicitly allowed is forbidden.”
China Mobile has reportedly set up an affiliate in the Netherlands, called Zong, which could be the vehicle used for purchasing its 12% stake in Far EasTone.
CLSA analyst Dee Senaratne said its “hard to say” whether Zong will be able to sidestep rules that ban cross-strait investment in Taiwan operators.
He said he would not be “100% surprised” if the original deal, announced in April 2009, was scuppered since the “whole process has taken a long time” to resolve.