Thai telco True Corporation may fail in its attempt to takeover Hutchison CAT Wireless Multimedia (Hutch) because of legal difficulties, reported the Bangkok Post.
Hutch is a CDMA JV between Hutchison Telecommunications International (with a 75% stake)…
Thai telco True Corporation may fail in its attempt to takeover Hutchison CAT Wireless Multimedia (Hutch) because of legal difficulties, reported the Bangkok Post.
Hutch is a CDMA JV between Hutchison Telecommunications International (with a 75% stake) and the Thai state-owned telco CAT (25%). The takeover deal by True Move, a mobile operator within True Corp, is said to be worth Bt1bn (over US$33m).
In a report yesterday, the Bangkok Post cited Jirayuth Roongsrithong saying that the deal was being affected by legal difficulties between Hutch and CAT over excise tax, numbering fees and interconnection charges.
Roongsrithong was quoted saying that Hutch had to make clear who would accept the burden of proof and the method for burden assessment.
The takeover has been made more complex by Thailand’s rules concerning public-private JVs.
Roongsrithong reportedly said that the Thai government’s legal advisory body, the Council of State, has said that Hutch will come under the 1992 Public-Private Joint Venture Act, because it is worth over Bt1bn.
This law forces any project costing over Bt1bn to be reviewed to ensure that it is in line with national plans for development.
According to the report, Roongsrithong insisted that Hutch’s business model would not breach the act.
Reportedly, the Council of State decided that even though Hutch is a public-private JV that would not affect the takeover deal with True Move as the deal would, in effect, simply be terminating one marketing contract and starting a new one.
True Corp and Hutch were unavailable for comment before the press deadline.
