HONG KONG (XFN-ASIA) - Any overt attempt to stop foreign investors from buying PCCW's telecom assets and entering Hong Kong's telecom industry can hurt the territory's image as being one of the world's top financial centers and an open city, a local legislator said.
'If for one reason or another, foreign investors are not allowed to buy PCCW's telecom assets, won't this send a wrong signal to foreign investors and damage our international reputation as an open city?' legislator Albert Cheng remarked to XFN-Asia.
'I don't think people should make a big issue of national security concerns in any PCCW deal,' he said.
'Times and technologies have changed, and eavesdropping can be done even if perpetrators don't control telephone exchanges or a telephone company. So, control of PCCW's telecom assets may not necessarily involve national issues,' he said.
Cheng was responding to concerns expressed in some quarters that PCCW may find it difficult to conclude any deal as Beijing would be worried that such a development might compromise national security.
At the close of morning trade, PCCW was down 0.10 hkd or 1.74 pct at 5.65 hkd and unit SUNDAY Communications was down 0.02 hkd or 3.39 pct at 0.57.
The Hang Seng Index was down 89.31 points or 0.56 pct at 15,737.39.
PCCW said in a statement earlier that media reports that it is considering a special dividend payment and may ultimately be privatised after a sale of key assets are pure speculation.
It said no consideration has been given as to what may be done with any proceeds of a possible sale of its telecommunications and media-related assets, or whether the firm may eventually be privatised.
PCCW confirmed that Macquarie Bank and TPG-Newbridge group have provided non-binding expressions of interest on a confidential basis to acquire the company's assets, but it will not disclose details at this stage.
(1 usd = 7.8 hkd)
jun.concepcion@xfn.com
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© 2006 AFX News
