Two weeks after receiving high court approval to proceed with the privatization of Hong Kong fixed line carrier PCCW, company chairman Richard Li withdrew the buyout plan yesterday after the Hong Kong Court of Appeals granted the request of Hong Kong’s Securities and Futures Commission (SFC) to block the US $2.6 billion deal. The court ruling, handed down on Wednesday, represents the latest and most stunning setback in a string of disappointments for Li, who attempted unsuccessfully several times over the past three years to divest his PCCW holdings before teaming up with China Netcom late last year to acquire shares of PCCW stock they do not already own for HK $4.50 per share. Earlier this year, the SFC opened an investigation after receiving complaints that a February shareholder vote on the proposed buyout was rigged. Rejecting SFC charges that illegal share splitting had taken place, High Court Judge Susan Kwan ruled in favor of the privatization plan earlier this month, determining that shareholders were “treated equitably in the reduction.” However, at the behest of the SFC, a three-judge panel of the Court of Appeals took up the case and, after hearing arguments last week, agreed that the SFC’s claims were valid. Declining to take his case to Hong Kong’s Court of Final Appeal, Li confirmed that he would not extend the offer beyond the original April 23 deadline, lamenting: “I feel sorry that minority shareholders have lost this chance, considering the overwhelmingly large vote registered in favor of the privatization.” Instead of issuing a final dividend for 2008, PCCW will issue a special dividend of HK $1.30 per share, and the company will be barred under Hong Kong law from considering another buyout bid for at least a year.