Hong Kong police have raided the home of PCCW chairman Richard Li as part of an investigation into the attempts to privatize the company last year.
Officers from the commercial crime bureau last week executed a search warrant at Li’s Hong Kong home as they sought more information about the circumstances of the failed HK$15.93 billion ($2b) deal, scmp.com reported.
Police earlier visited the offices of insurance company Fortis, whose staff had been given 500,000 PCCW shares as a bonus.
The deal collapsed after the Hong Kong Court of Appeal ruled that the issue of stock had been part of a “clear manipulation” of the shareholder vote and had hurt minority shareholders.
Under the proposed deal, Li’s Pacific Century Regional Developments (PCRD) – PCCW’s largest shareholder - and China Unicom had offered to buy all the shares they did not own at HK$4.50.
Shareholders approved the deal and the Hong Kong High Court gave it the go-ahead. But the Securities and Futures Commission took the case to the court of appeal, which ruled the shareholder vote was rigged.
The SFC had claimed that Fortis' regional director, Lam Hau-wah, had bought PCCW shares and distributed them to more than 400 Fortis agents and their friends as bonuses after phone conversations with PCRD deputy chairman Francis Yuen.
Shareholder activist David Webb, who made the issue public after receiving information about the distribution of PCCW stock in January 2009, told scmp.com that investigators were “a year too late”
Li’s lawyer Martin Rogers, from law firm Clifford Chance, told the Post that he did not believe Li was “the target of any investigation or that any senior management of PCRD or PCCW has committed any wrongdoing.”