RICHARD Li Tzar-kai sold the satellite business of his Pacific Century group to Hutchison Telecommunication International to avoid a potential conflict of interest because of his involvement with Hutchison Whampoa, according to a Pacific Century executive. His group sold Pacific Century Technology Investments (PCTI) to Hutchison Telecommunication International, a subsidiary under the Hutchison Whampoa umbrella controlled by his father Li Ka-shing, in a deal worth $575.65 million. The Pacific Century executive said the transaction was to avoid tension between the two groups, controlled by father and son. Analysts discounted speculation that Pacific Century was facing a financial crisis. They saw the move as allowing Hutchison to complete its range of telecommunication services by entering into the VSAT (very small aperture satellite technology) market established by PCTI. Pacific Century executive vice-president Arnie Tucker said PCTI was sold at cost to the Hutchison group to avoid a conflict of interest, because Richard Li also was deputy chairman and an executive director of Hutchison Whampoa. There had been no conflict between PCTI and the Hutchison group, Mr Tucker said, but such conflict might have been inevitable if PCTI had sought further expansion. Baring analyst David Barden said the purchase would enable Hutchison Whampoa to complete its portfolio in its communication operation but said the newly acquired VSAT business would contribute only a small portion of the whole operation. PCTI had been marketing VSAT services to companies worldwide to transmit and receive data through relatively small antenna dishes. 'VSAT is another business endeavour for Hutchison Whampoa and the company will use VSAT to offer complementary services to other existing items,' Mr Barden said. 'The VSAT market is very small but has the potential to be a big operation.' It would represent only a small fraction of turnover and profits of Hutchison Telecommunication. PCTI had regional contacts in Hong Kong, Shanghai, Britain and India which would be useful to Hutchison to develop its fixed-line services, he said. Asia Equity analyst John Hetherington said the deal was not driven by financial needs of the Pacific Century group, despite the S$6.4 million (about HK$35 million) net loss posted by the Singapore-listed subsidiary, Pacific Century Regional Development, for the six months to June 30 this year. Mr Hetherington said the recent disposal of STAR TV should have left Pacific Century in a stable financial position. He said the transaction was driven by Hutchison Telecommunication's need to offer full services to its corporate clients.