Reclusive Billionaire Teoh Takes Stand In ACCC Merger Case
TPG Telecom’s reclusive billionaire founder David Teoh, in a rare public appearance, yesterday took the stand in the Federal Court to argue the case for the telco’s planned merger with Vodafone Hutchison Australia, a move opposed by the Australian competition watchdog.
Teoh, who usually keeps his views very much to himself, was forced to front the court, a move which highlighted the gravity of TPG and would-be partner Vodafone’s case against the Australian Competition and Consumer Commission.
Teoh was ranked at 25 on the Australian’s Richest 250 list earlier this year, with a personal fortune of $2.53 billion.
Yesterday’s public grilling came as part of a case brought by TPG and Vodafone before Justice John Middleton, seeking to overturn the ACCC’s rejection of the planned $15 billion tie-up.
Appearing before the court, Teoh also came under intense pressure to justify the reasons TPG had picked Huawei’s equipment for its planned mobile network.
Teoh said the company’s aspirations to become an early mover in 5G were underpinned by the capabilities Huawei offered.
“In July 2017, Huawei told us they could give us 4G equipment that could be upgraded to 5G. We specified them a few months later,” he said.
“Around that early stage, Huawei still didn’t have the 5G MIMO (Multiple-Input Multiple-Output) solution.”
However, ACCC counsel Michael Hodge QC took issue with this, claiming that 5G was never part of TPG’s mobile plan. “The reason you selected Huawei in 2017 was not because Huawei provided you a 5G upgrade path,” he said.
TPG cited the Federal Government’s decision to ban Huawei’s 5G equipment as the main reason for its decision to ditch its mobile plan.
Stopping its mobile rollout has taken a toll on TPG’s books, with the company taking a 56 percent hit to its net profit of $173.8 million for the 12 months to July 2019, with revenue for the period flat at $2.48 billion.
In arguments so far, the ACCC’s legal team has homed in on the financial position of both TPG and Vodafone, contending that both telcos had deliberately talked down their prospects to justify the merger.
On Wednesday, Vodafone Australia boss Inaki Berroeta told the court that, without the merger, Vodafone Australia would have to get more funding from its two parents – Vodafone Group and Hutchison Telecommunications.
“To increase my capex I would have to present a case that justifies that,” he said. “I don’t think presenting a plan to my shareholders to increase the debt would be very wise.”
The case continues.