Doubt over whether Richard Li knew of father's role led SFC to investigate The Securities and Futures Commission says it is unlikely to take action against PCCW after complaints that it and other parties misled the public about a bid to buy chairman Richard Li Tzar-kai's controlling interest in Hong Kong's largest telecom company. In a written submission to the Legislative Council, the SFC confirmed for the first time that it began investigating the bid in October. In the same paper, the stock exchange said it too concluded that no further action was warranted. At a Legco panel meeting last month the SFC had refused to reply to lawmakers' questions about whether it was probing PCCW, citing secrecy provisions and the need to avoid influencing independent shareholders of Singapore's Pacific Century Regional Developments, who were required to voted on the deal two weeks ago. After they rejected the offer, the SFC felt free to reveal its investigation. 'The SFC has now completed its fact finding and is in the process of reviewing the material. Based on the information gathered the investigation is not likely to result in any further action,' the SFC paper said. A source familiar with the investigation said the SFC acted because of public confusion about whether Richard Li had known from the start that his father, tycoon Li Ka-shing, was the financial backer of Francis Leung Pak-to, who offered HK$9.2 billion to purchase the chairman's 23.6 per cent stake in PCCW in July. The investigation focused on whether company announcements that Richard Li had no prior knowledge of his father's role amounted to false disclosure, the source said. Controversy arose when it emerged that Li Ka-shing had financed Mr Leung's deposit on the purchase. Both initially denied that was the case but Mr Leung later admitted the tycoon had lent him money for investment, though not specifically for the PCCW purchase. In November, Mr Leung disclosed that Li Ka-shing would take a 12 per cent stake in PCCW for HK$4.8 billion through his two foundations. Richard Li subsequently denied being previously aware of his father's involvement, though that assertion was contradicted by Mr Leung. The source said even though initial findings showed the parties had made contradictory statements, it would have been hard to prosecute since PCCW's announcements had made little mention of whether the father and son had discussed the deal. The statements made by Li Ka-shing and Mr Leung were verbal and not company announcements. 'The law allows the SFC to prosecute if there is inaccurate information in listed company announcements or if anyone uses misleading information to make a profit by manipulating the share price. But there was no clear evidence to support that conclusion,' the source said. Chim Pui-chung, legislator for the financial services sector, urged the SFC to pursue its investigation. 'If the SFC decided not to take action against the Li family just because they are owners of big companies, it is totally unacceptable,' he said. 'We have seen the commission take tough action on small listed companies and small brokers for minor mistakes. The SFC should clarify if it used double standards.' Democratic Party economic affairs spokesman Sin Chung-kai said the financial affairs panel would continue to grill the SFC. 'We would like to see more of its findings. The commission may have good reason not to take action but the public has to be informed of the reasons.'