We erred in crediting the South China
Morning Post
with breaking the MacBank/PCCW takeover story – the pink paper
people at FT.com
had it first, after which the SCMP has run with it.

The old China
hand who pointed out our mistake made some interesting noises about MacBank
perhaps backing the wrong mainland
partners – hence the antipathy from 20% PCCW shareholder China Netcom.

Our informant reckons Macquarie’s Asia chief, Simon Murray, has Shanghai
connections through Jiang Zemin’s son, Jiang Miankang, and Netcom’s founder,
Edward Tian, but Beijing cadres are
in firm control of Netcom these days, having given Tian the flick.

Throw in the usual Beijing-Shanghai
antipathy and it looks like the right people weren’t smoothed on the bid before
it was made – and thus a veto appears to be on the cards. Without Netcom’s good
will, the suggested prices look ridiculously high anyway.

Richard Li wants out of a company that
isn’t going anywhere fast and is dependent on the Beijing boys. As Reuters
notes, this auction is symptomatic of a glut of private equity funds in search
of targets.

Peter Fray

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Editor-in-chief of Crikey