The HK$15.93 billion buyout deal for PCCW was described yesterday by a Court of Appeal judge as an 'outrageous' attempt to squeeze out small shareholders who had put their life savings into a stock that had suffered a 'pathetic' decline.
Mr Justice Anthony Rogers' strongly worded comments came on the fourth day of an appeal hearing against plans to privatise the city's largest telecoms company. The fight against the plan is being spearheaded by the Securities and Futures Commission, which claims vote-rigging helped secure the deal.
Mr Justice Rogers said that he did not see the rationale behind the privatisation, which offered shareholders a price way below what the shares normally traded at.
'It is simply not good enough to buy out the shares at a price based on the last trading day before the announcement, which was the rock bottom price ... 30 per cent [less] than previous trading. Why?'
He also questioned why the controlling shareholders - Pacific Century Regional Developments and China Unicom Group - were trying to transfer the company to Singapore. PCRD, one of the offerors and controlling shareholders of PCCW, is the Singapore-listed flagship of PCCW chairman Richard Li Tzar-kai.
'Two to three years ago [you] tried to sell to foreign companies and were stopped. Now [you want] to sell to a Singapore-listed company.'
In 2006, Mr Li cultivated bids of up to HK$60 billion for PCCW's best assets from Australia's Macquarie and Newbridge of the United States. But that deal was stymied by Beijing.