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Richard Li has been barred from voting on the proposed $1.2bn sale of Hong Kong’s leading telecoms firm, PCCW, in a decision that gives minority shareholders in his Singapore-listed holding company the power to block the controversial transaction.

In a statement issued on Tuesday, Pacific Century Regional Developments (PCRD), which is 75 per cent held by Richard Li, said Singapore’s stock exchange had not received a guarantee that Li Ka-shing, Richard’s father and Hong Kong’s richest man, would not be involved in a consortium looking to buy PCCW.

In the absence of such an assurance, Singapore Exchange (SGX) ruled that Richard Li must abstain from a shareholders’ vote on the transaction.

The consortium that wants to buy PCCW is being organised by Francis Leung, a prominent Hong Kong investment banker and confidant of Li Ka-shing. In July, Mr Leung agreed to pay PCRD $1.2bn for its 23 per cent stake in PCCW.

Had Richard Li been allowed to vote, passage of the deal would have been assured. Its fate now lies in the hands of PCRD’s minority shareholders. SGX and Mr Leung both declined to comment on Tuesday.

SGX’s ruling will reinforce suspicions in Hong Kong that Mr Leung is fronting for Li Ka-shing in the transaction.

When the sale was announced in July, Richard Li and Mr Leung said that Li Ka-shing was not involved. At a company results briefing in August, Li Ka-shing reiterated that claim.

In September, however, PCRD revealed that Li Ka-shing had provided Mr Leung with a bridging facility to pay a $64m deposit. But the company argued that because the arrangement had been temporary and the loan already paid back, the proposed sale should not be deemed a related party transaction.

In their July agreement, Mr Leung agreed to pay PCRD HK$6 a share – a level that PCCW’s shares have not traded at in more than two years.

But hedge funds that have been building up positions in PCRD are in a position to extract better terms from Richard Li or pressure him to pay them a special dividend – something he has promised PCCW’s shareholders.

The handsome premium Mr Leung has agreed to pay for PCCW’s shares has fuelled speculation that he will turn to Li Ka-shing for help.

Additional reporting by Justine Lau in Hong Kong and Sundeep Tucker in Beijing

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