Reversing his earlier stance, PCCW Chairman Richard Li launched a legal challenge this week against a recent Hong Kong court ruling that blocked the proposed privatization of PCCW. The court ruling was issued on grounds that a February shareholder vote on the US $2.6 billion transaction was rigged. The appeal filed Wednesday with the Hong Kong Court of Final Appeal follows the release Monday of the text of last month’s decision by Hong Kong’s Court of Appeal. In its 74-page opinion, the court detailed how a manager at an insurance firm once controlled by an investment vehicle owned by Li gave away thousands of PCCW shares to new holders in the weeks prior to the February 2 shareholder vote. Although shareholders representing more than 75% of PCCW shares approved the transaction, Hong Kong law requires the approval of at least 50% of shareholders involved in a merger or acquisition without regard to the amount of stock held by each shareholder. Notwithstanding Li’s claim that the manager merely gave away the shares without telling the recipients how to vote, the court wrote that the share split amounted to “clear manipulation.” After the Court of Appeal announced its verdict last month, Li withdrew the joint offer through which Pacific Century Regional Developments (a Singapore investment firm owned by Li) and China Netcom would acquire PCCW stock they do not already own for HK $4.20 per share. Li and China Netcom would be entitled to re-open their offer if the appeal succeeds.