According to a source, who works for a leading capital management firm in Singapore, a PCCW top guy has confided with him saying they did meet all the obligations set forth by TRA within the deadline. They are bewildered as to why their claim was rejected at the last hurdle.

The source said a reason for TRA to shun PCCW could be the proposed leveraged buyout of PCCW and the resulting increased leverage at PCCW.

He says:

The major shareholders of PCCW, Richard Li and China Netcom, have proposed to buy all the shares they don’t own from minority shareholders. The fund for the purchase will come from PCCW borrowing more money from banks led by HSBC. If the deal is concluded, PCCW will no longer be listed on the Hong Kong Stock Exchange and PCCW’s financial position will become weaker due to the increased debt and its debt credit rating will likely be downgraded. They just announced the proposed buyout on November 4.

Related read: Richard Li’s New PCCW Ploy