According to a report from the Legal Times on Tuesday, concerns over US national security could scupper Global Crossing's planned takeover by two foreign investors, Hong Kong-based Hutchison Whampoa, and Singapore Technology Telemedia Pte.
Following the telecommunications giant's descent into bankruptcy last year, the two would-be investors offered to pay $125 million each for a combined 61.5% stake in the company. However, fears about allowing Global's extensive fiber-optic network - used by government agencies both in the US and elsewhere, and by international businesses - to fall into the hands of foreign interests are stalling the process.
The Legal Times revealed this week that if the secretive Committee on Foreign Investment (CFIUS) fails to agree to the sale by the February 24 deadline, the decision will be passed to the White House - a prospect that has caused Global Crossing to recruit a team of top telecoms lawyers and lobbyists in order to persuade the CFIUS members to sign off on the deal.
The British government, which also uses the network, has told the company that it will not be blocking the deal. However, recent reports have suggested that concerns with regard to possible ties between Hutchison Whampoa and the Chinese goverment have been expressed by both the FBI and the Department of Defense.
'In recent weeks, Global's advisers have sought to blunt US security concerns by offering to seal off the company's US network within a 'secure subsidiary' controlled by people with national security clearance,' the legal news service revealed yesterday, adding that: 'On February 7, Global submitted a 36-page document spelling out the technical details of that proposed plan to CFIUS.'
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