C&W's Oz Deal on Hold as SingTel States Its Case
Ellis, Eric, The Evening Standard (London, England)
Byline: ERIC ELLIS
AS Royal Dutch/Shell considers the implication of the Australian government's blocking of its A$10 billion ([pound]3.6 billion) takeover bid for Woodside Petroleum, Cable & Wireless would do well to take note.
C&W expects [pound]6 billion from the sale of Australian offshoot Optus to Singapore Telecommunications. SingTel and C&W have agreed terms, but the decision on Woodside - "contrary to the national interest" - suggests regulatory hurdles may yet prove insurmountable.
Canberra's defence and intelligence services are concerned about the sensitive, defence-related communications satellites operated by Optus - effectively under the control of SingTel which is majority-owned by the Singapore government.
SingTel does not have a stellar record when it comes to using, if not abusing, its networks. In 1999, the carrier's internet service was found to have been snooping on the computers of 200,000 subscribers in Singapore.
Unsurprisingly, it has been at pains to assure Australia that it will strictly adhere to privacy standards and is downplaying the potential for the deal to be scuppered.
Chairman Koh Boon Hwee says SingTel operates under the "world's best practices" of corporate governance.
Security sources, however, believe the Australian Security Intelligence Organisation could advise against approval, though it does not have a right of veto while recent leaks in the Australian media suggest ASIO and the powerful defence departments are against the deal on national security grounds. …