PCCW vote-splitting was "clear manipulation"

PCCW vote-splitting was "clear manipulation"

Robert Clark  |   May 12, 2009
telecomasia.net
Thumbnail: 

Hong Kong is the kind of place where the rich and powerful can go about their business without too much trouble from officialdom.

Which makes even more astonishing the bollocking delivered by senior judges to the attempt by Richard Li, the son of Hong Kong’s richest man, to privatize the listed incumbent PCCW.

It may even have played a part in Li’s decision to proceed with one last appeal, having earlier said he would drop the buyout plan because it was distracting for the company and “divisive” to Hong Kong.

Explaining its unanimous decision to block Li’s attempted $2.1 billion privatization, the Court of Appeal said on Monday the scheme was "clear manipulation".

"Vote manipulation is nothing less than a form of dishonesty.  The court cannot sanction dishonesty," said Mr Justice Rogers, already a local hero to minor investors for criticizing the buyout during the hearing.

The three appeal court judges were hearing a review into the ruling by lower court judge, Justice Kwan, who flagged the shareholder vote through despite strong evidence that it had been manipulated.

According to Rogers, Kwan had considered that it would be impossible for the court to decide whether there had been vote manipulation and in any case there was "no reason for the court to be concerned" even if share-splitting had taken place.

Kwan had also declined to believe that two of the key characters, PRCD vice-chairman Francis Yuen and Fortis insurance Asia regional director Inneo Lam, had had anything to do with each other, despite "a remarkable series of coincidences."

Yuen was a former executive chairman of Fortis Insurance’s parent company, while it was Lam who had distributed 500,000 PCCW shares to staff and friends to enable the share-splitting to occur.

The two had contact in late 2008 and exchanged number of phone calls in late 2008 and January 2009. In what Rogers called "no mean feat of organization," Lam's secretary obtained the proxy vote papers from Yuen’s secretary and had distributed them and ensured the votes were registered.

The judge noted that 494 people who had received shares Lam voted in favor of the scheme by proxy, and of those 335 of those were agents of Fortis Asia.

Rogers said there was no rationale behind the buyout scheme and no explanation given "for the almost total loss of value of the company" since Li acquired Hongkong Telecom.

In a rebuke to Kwan, Rogers said that if the court were to condone "vote splitting and other forms of vote manipulation" it then it would become a standard practice to distribute shares in order that people could vote.

"To use the vernacular, it would become a free for all; any vote would be meaningless."

Robert Clark

Comments

Find christian louboutin

Find christian louboutin sale here!No matter what feeling you have now,there is always a pair of christian louboutin shoes suitable for you.You can find almost every style of christian louboutin you want here!

What if we tell you that you

What if we tell you that you could buy a
Louis Vuitton Bags without denting your budget, a bag that would certainly leave Mrs. Jones, your next-door neighbour enviously wondering how you could swing it on your income! Come on, she needn't know that it's a
replica handbags from our site.

Tell Us What You Think

Add comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <a> <p> <span> <div> <h1> <h2> <h3> <h4> <h5> <h6> <img> <img /> <map> <area> <hr> <br> <br /> <ul> <ol> <li> <dl> <dt> <dd> <table> <tr> <td> <em> <b> <u> <i> <strong> <font> <del> <ins> <sub> <sup> <quote> <blockquote> <pre> <address> <code> <cite> <embed> <object> <strike> <caption>
  • Lines and paragraphs break automatically.
  • Use <!--pagebreak--> to create page breaks.

More information about formatting options

Frontpage Content by Category

Telecomasia.net's most popular news stories, blogs, analysis and features in the first six months of 2010

Video from Telecom Channel

Sharing cross-domain knowledge
On road to BSS transformation, StarHub first rotated staff to develop skills across its quad-play silos.      
 

Voices_tabs

Nicole McCormick
And puts iPhone further out of reach
Robert Clark
Authoritarianism in the time of the internet
Jens Butler and Mike Sapien/Ovum
Is it all really about cloud and convergence, or just a land grab?
Caroline Gabriel/Rethink Wireless
Carriers must forge partnerships and open up networks
John C. Tanner
It's not clear how consumers benefit from industry-preferred model of exclusive TV content contracts
Robert Clark
Try a checklist if your company has walls that need breaking down or information to be shared

businessweek_industryview

Douglas MacMillan and Joseph Galante
After years of losing ground to Amazon in traditional online retailing
Ivan Pepelnjak
Several solutions that attempt to solve IPv4 address exhaustion are network ready

MWC2010 List

MOBILE WORLD CONGRESS 2010
HTC guns for top 3 smartphone makers
Powermat wants to charge your desktop
Femtos outlook improves as cellcos seek offload options
Cheaper smartphones key to broadband takeup

lighter_side_telecom_career

Staff writer
Turning your mobile device into its own mouse
Staff writer
Bhupinder Singh to strengthen the service delivery team in Asia Pacific