China Telecom restructured its operations, with China Telecom Corporation Limited ("CTCL")—also a Chinese company—acquiring full equity interest in CTA from China Telecom.[1] The stated purpose of the ownership change was for China Telecom to "structure its business and operations in an efficient manner."[2] But, the change had no impact on CTA's ultimate ownership.[3]
Pre-Transaction Structure
- ↑ China Telecom (USA) Corp. Application for International Section 214 Authorization for Assignment or Transfer of Control, https://licensing.fcc.gov/cgi-bin/ws.exe/prod/ib/forms/attachment_menu.hts?id_app_num=69776&acct=434900&id_form_num=17&filing_key=-133273.
- ↑ Id. at Attach. 1.
- ↑ Id. According to Team Telecom's records, CTA informed Team Telecom that China Telecom had the ability to control the election of CTCL's directors; approve CTCL's budget; approve mergers and acquisitions; amend the Articles of Association; determine the timing and amount of dividend payments; and determine the issuance of new securities. See TT-DOJ-001-10, at TT-DOJ-003. In discussions with the Subcommittee, CTA stressed that CTCL and China Telecom both have their own corporate governance safeguards and transparency controls. Further, as a publicly listed company, CTCL is "subject to rigorous legal regulation and public oversight." CTA told the Subcommittee that CTCL has a board of directors and senior management to run the company independently, with SASAC acting only as a capital contributor. Letter from Morgan, Lewis & Bockius LLP, counsel to CTA, to the Subcommittee (June 2, 2020) (on file with the Subcommittee).
- ↑ See TT-DOJ-001-10, at TT-DOJ-012.
granted in August 2002. See supra Part IV.B.1. Team Telecom officials informed the Subcommittee that they were aware of CTA's August 2002 authorization and the 2002 license described in the March 2017 site visit report refers to CTA's August 2002 authorization. See Email from the Dep't of Homeland Sec. to the Subcommittee (June 4, 2020) (on file with the Subcommittee). As evidenced above, however, the report only references the authorization China Telecom transferred to CTA; it makes no reference to CTA's August 2002 authorization.
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