The
legal person of PCCW Limited was incorporated as "Ring Holdings Limited" () on 24 April 1979. It was renamed several times and known as () in 1992. In October 1994, Tricom Holdings became a listed company. In May 1999
Richard Li acquired the company, and as a backdoor listing, the listed company was renamed to
Pacific Century Cyberworks Limited (; abb. PCCW) in the same year. In March 1999,
Richard Li's private company
Pacific Century Group won a controversial land deal, acquiring valuable waterfront real estate from the government without any
public auction bids. The Hong Kong government, under chief executive
Tung Chee Hwa, gave away the land to his new high-tech residential and commercial venture called
Cyberport. The development of Cyberport was later injected to Pacific Century Cyberworks Limited (Chinese: 盈科數碼動力有限公司; abb. PCCW), a new company formed in May 1999 via a backdoor listing. The stock of Pacific Century CyberWorks rose from HK$6.00 to HK$19.50 between 1 and 28 December 1999. 23 Dec is a Heritage of Pacific Century CyberWorks, breaking the record of a single company in Hong Kong history with a HK$5 billion transaction. Pacific Century CyberWorks became the seventh-listed (value over HK$170 billion) company on the Hong Kong Exchange on 28 December 1999. PCCW acquired Hong Kong Telecom (HKT) in August 2000, which was formerly known as the "Hong Kong Telephone Company" (founded in 1925). Initially, HKT owner
Cable & Wireless entertained a bid from
Singapore Telecommunications, but there was Beijing concern about a Singapore company owning the largest Hong Kong telephone system. PCCW entered the scene and offered Cable and Wireless PCCW stock and US$11 billion in bank loans by
HSBC,
Bank of China,
BNP Paribas and
Barclays. The acquisition vaulted PCCW from a
dot-com holdings company to one of the largest universal
corporations in Hong Kong. PCCW was now also the leading
Internet service provider in Hong Kong, using the
Netvigator brand for dial-up modem and
DSL service. PCCW was the object of much scorn in Hong Kong as a result of the HKT purchase. In 2003, the company's stock price was down 96 percent from its 2000 peak. In the face of challenges due to debt, intense local telecoms competition and a struggling international joint venture
Reach (50/50 owned by PCCW and
Telstra), PCCW was the worst-performing
blue chip on the
Hong Kong Stock Exchange (HKSE) in 2002 and 2003. Stock price came down from HK$129.25 to HK$4.7 in less than three years. In 2003, Cable and Wireless finished cashing in all the stock from the 14.7 percent stake it had in PCCW. Worth US$5 billion at the time of the 2000 acquisition of HKT, the stock sales yielded only $1.9 billion in the end. Richard Li resigned as PCCW's Chief Executive Officer in June 2003 but remained Chairman and Executive Director.
Jack So, who left his Chairman position at Hong Kong subway operator
MTR Corporation Limited, took up the job of Deputy Chairman and Group Managing Director at PCCW on 25 July 2003. George Chan resigned as a Group Managing Director and Executive Director in 2014. Former
Infosys president B.G. Srinivas was announced as the Group's Managing Director, effective July 2014. After several years as a wholly owned subsidiary, PCCW floated HKT again in 2011.
FBI surveillance According to a FCC document, undersea cabling company
Reach – a joint venture of
Telstra (then 50.1 percent-owned by the
Australian
Government) and PCCW, a Hong Kong corporation – had to send all communications to or from US to a storage facility "physically located in the United States, from which Electronic Surveillance can be conducted pursuant to Lawful US Process." The document also specifies the facility should be run exclusively by US
FBI staff.
Attempted privatisation Although PCCW's substantial shareholder
China Netcom had earlier expressed objection to any disposal of key assets to foreign groups, it also refused to increase its stake; Richard Li attempted to exit from the business in 2006. PCCW confirmed that Australia's
Macquarie Bank and private equity firm
Texas Pacific/
Newbridge, had submitted expressions of interest to acquire PCCW's core telecom and media assets. PCCW chairman
Richard Li agreed to sell his indirectly held 22.66 percent stake in PCCW on 11 July 2006 to Fiorlatte Ltd, a new startup company wholly owned by Francis Leung Pak-to, for a total consideration of HK$9.16 billion. In turn, Francis Leung Pak-to agreed to sell an 8% stake in PCCW to
Telefónica for 323 million euros. Leung, former
Peregrine investment banker, is closely associated with
Li Ka-shing. PCCW's stock, which had joined
Hang Seng Index (HSI) index on 9 August 2000, ceased to be a HSI constituent, effective 10 June 2008.
Purported Cable & Wireless takeover bid News report from the
Sunday Times on 6 February 2003 revealed that PCCW made a preliminary takeover approach to Cable & Wireless in December 2002 as the British company's share languished near record lows. Li told the Sunday Times newspaper that PCCW would not launch a hostile bid for C&W but that the two companies could work together to enhance shareholders' value. The Times quoted Li as saying that he was planning to try again that week with a two billion pound (US$3.27 billion) bid for C&W. Following the news report, PCCW issued a statement through the Hong Kong stock exchange on 6 February 2003 morning saying it had not made a formal offer for C&W and was not in takeover talks with the company. Later in the day, in London and Hong Kong, PCCW issued statements saying it had made a preliminary takeover approach to C&W in a letter at the end of 2002. PCCW apologised on 10 February 2003 for making what some in the market see as contradictory statements. The
Hong Kong Stock Exchange demanded an explanation from PCCW after noting discrepancies between the two statements regarding its approach to C&W about a possible bid. In any case, C&W had rebuffed PCCW's takeover approach by February 2003.
Privatisation plan In a heated shareholders meeting held on 4 February 2009, which lasted seven and a half hours, the shareholders approved the PCCW plan allowing its majority shareholders to force out all minority shareholders of the company amidst allegations of vote-buying. Privatisation would allow PCCW to be
delisted from Hong Kong Stock Exchange, while its parent would remain listed in Singapore. Governance activist
David Webb alerted the authorities to allegations that hundreds of agents at Fortis Insurance Co. (Asia), once part of PCCW, may have been given board lots of 1,000 PCCW shares. The Securities and Futures Commission found that Francis Yuen, a Li associate, and member of the buyout group, had instructed a senior executive at Fortis to distribute PCCW shares to about 500 Fortis agents. Yuen and Fortis Asia regional director, Inneo Lam, had exchanged telephone calls shortly before Lam ordered half a million PCCW shares that were later split into board lots and given away to his staff; Lam's secretary had asked for, and received, share transfer forms from Yuen's secretary. Majority shareholders gained approval from the High Court to proceed with their US$2.2 billion privatisation, but the Appeals Court unanimously overturned the ruling. ==See also==