Leaked memo drives Telecom down
SHARES of Hongkong Telecom declined yesterday, after the Business Post reported details of a leaked memo from the chief executive, urging managers to control costs because the firm was in danger of missing its financial targets.
Shares opened at $13.80, down 1.78 per cent on Thursday's close of $14.05.
In a day on which 16.74 million shares changed hands, the price dipped as low as $13.60, but later recovered to close at $13.80.
Hongkong Telecom confirmed the memo was penned by Linus Cheung but said cost reduction targets were 'part of a continuing process to address the company's cost base and the mechanism for controlling expenditure'.
'The communication was the latest in what are monthly briefing papers which cover many aspects of the company's business, and was part of the normal internal management control process,' a spokesman said.
Other analysts saw the leaked memo as part of a public relations campaign.
The company has become increasingly sensitive to consumer concern that if it is making a big profit, it is made at the expense of consumers in a captive market.