Europe : Hutchison Whampoa of Hong Kong (HWL) and KPN Mobile of Netherlands (KPN) have signed an agreement which means that KPN will pass its 15% shareholding in Hutchison 3G UK back to Hutchison Whampoa for £90,000,000 ( £90 million pounds).

Inset is Canning Fok, Group Managing Director of Hutchison Whampoa who sees the investment as an excellent move.

History

KPN Mobile N.V. announced it considers Hutchison Whampoa Limited to be in material breach of the shareholders agreement (due to its continued support of an invalid funding call ), issued by Hutchison 3G UK Holdings Limited.

As a result of this material breach, on May 27, 2003, KPN Mobile served a notice requiring Hutchison Whampoa Limited to buy its shareholding in Hutchison 3G at 140% of the fair price (as it is entitled to do under the shareholders agreement).

On June 2, 2003, Hutchison Whampoa Limited issued a claim form in the English High Court seeking a declaration that the March 11 funding call was a valid funding call under the shareholders agreement. Hutchison Whampoa Limited also seeks unspecified damages. KPN Mobile will strenuously resist these claims.

On June 2, 2003, Hutchison Whampoa Limited also served a notice seeking the transfer of (a part of) KPN Mobile's shareholding in Hutchison 3G in return for a cession of a GBP 150 million loan granted by Hutchison Whampoa Limited to Hutchison 3G. KPN Mobile was originally requested to grant such loan to Hutchison 3G under the March 11 funding request.

Settlement

£60 Million pounds has been paid to KPN Mobile with a further 3 equal installments totaling £30 Million payable in 2005, 2006 and 2007. Ownership of shares will then be transferred over to HWL.

Both parties have now stopped legal proceeding against each other and are happy to put this dispute behind them. In fact, Canning Fok, Group Managing Director of Hutchison Whampoa Limited sees the purchase as an excellent move cementing increased interests in Hutchison 3G UK for the group.