• Fri
  • Oct 24, 2014
  • Updated: 4:05am

Richard Li

Richard Li Tzar Kai is the younger son of Li Ka-shing, a rags-to-riches tycoon known as “Superman” in Hong Kong, his adoptive home. Li Ka-shing in 2012 anointed his elder son, Victor Li, to follow him at the helm of flagship property developer Cheung Kong (Holdings) Ltd, and Hutchison Whampoa Ltd, a conglomerate whose activities span ports, telecoms retailing, energy and infrastructure. But he also vowed to support the business ventures of Richard Li, who is the chairman of phone, pay-television and Internet company PCCW Ltd, formerly Hongkong Telecom.

PCCW shares sink on concern over SFC probe

PUBLISHED : Saturday, 07 February, 2009, 12:00am
UPDATED : Saturday, 07 February, 2009, 12:00am
 

Shares of PCCW dropped nearly 3 per cent yesterday when trading resumed after a two-day suspension, as investors were unnerved by the risk that the firm's privatisation would be affected by a regulatory probe.

The stock, which dipped to as low as HK$4.01, closed at HK$4.05, with HK$588 million worth of shares changing hands. The closing price was 10 per cent less than the HK$4.50 a share chairman Richard Li Tzar-kai and China Unicom Group had offered to take the company private.

Minority shareholders voted in favour of the privatisation on Wednesday, but the Securities and Futures Commission is investigating allegations of improper share transfers.

Hundreds of Fortis Insurance sales agents had reportedly each received 1,000-share lots of PCCW stock in return for pledging to vote in favour of the deal. Observers said the HK$15.9 billion deal might face a delay as a result of the securities regulator's high-profile investigation.

Morgan Stanley said the investigation of the allegations regarding illegal share transfers would weigh on PCCW shares in the near term. The bank cut its target price to HK$4.50 from HK$5.3 and downgraded the stock's rating to 'underweight' from 'overweight'.

PCCW has said it would fully cooperate with the SFC and indicated it had no knowledge of any improper share transfers made by any shareholders as alleged and that it has initiated a review of the share register over the past two months.

Goldman Sachs said investors' concern might be overdone.

'The outcome of the investigation is unclear, but we believe the risk does not warrant a negative view on the stock given a lack of concrete evidence at this stage linking the shares in question to PCCW,' it said in a report.

Regulatory risk

Investigation by securities watchdog could delay buyout

At yesterday's close, PCCW's shares fell short of the privatisation offer price by: 10%

Share

Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or