Shareholders in Richard Li's Pacific Century Regional Developments (PCRD) rejected the sale of its 23 per cent stake in Hong Kong phone company, PCCW Ltd, for US$1.17 billion, thwarting the 40-year-old tycoon's efforts to exit the investment.

Yesterday's vote rejected the US$1.17-billion buyout led by financier Francis Leung. The rejection by 76 per cent of the minority shareholders extends what has been a tumultuous six years for Li in control of Hong Kong's dominant fixed-line carrier.

The outcome of the vote by holders of the 25 per cent of PCRD that Li does not control had not been certain, given that Li himself told a Hong Kong newspaper last week that he hoped the deal would fail after his father, billionaire Li Ka-shing, emerged as a member of the buyout coalition.

"It's a soap opera," said Francis Lun, general manager at Fulbright Securities in Hong Kong, who predicted on Wednesday that Singapore-listed PCRD shareholders would reject the deal because it was not as attractive as two earlier bids by foreign private equity investors for PCCW's main phone and media assets.

Leung, a long-time banker to Li Ka-shing, stepped in with his HK$6 a share offer in July.

The deal effectively ended the competing bids from US buyout house TPG-Newbridge and Australia's Macquarie Bank, which had respectively offered US$7.55 billion and US$7.3 billion, including debt, for PCCW's main assets.

Leung, a former Citigroup banker, had hoped to bring private equity partners into his bid for PCCW but later said he was unable to do so.

Instead, two charitable foundations controlled by Li Ka-shing the richest man residing in Asia agreed to take a 12 per cent stake in PCCW through Leung, while Spain's Telefonica signed on for 8 per cent.

In an unusual statement last week, Leung said that he had offered to call off the deal over Richard Li's objection to Li Ka-shing's involvement in the buyout group.

The elder Li's role in the deal had already been disruptive after he had unbeknown to Richard Li provided a HK$500 million (US$64.1 million) bridge loan to Leung. That prompted the Singapore bourse to block Richard Li from yesterday's vote, leaving the deal's fate in the hands of minority shareholders.

Li Ka-shing's involvement had caused worries it could lead to concentration of ownership of telecom assets in Hong Kong.

The elder Li's Hutchison Whampoa Ltd controls fixed and mobile networks in Hong Kong through its Hutchison Telecommunications International Ltd.

On a personal level, Li Ka-shing's role undermined Richard Li's efforts to remove himself from the sizeable shadow cast by his father, known as "Superman" for his deal-making prowess.

Telefonica had said it would join its stake in PCCW with the nearly 20 per cent held by China Network Communications Group that would be the Hong Kong carrier's single largest shareholder.

Richard Li's one-time Internet start-up paid US$28.5 billion in 2000 for Hong Kong's former phone monopoly, but the company was quickly battered by the bursting of the Internet bubble and fierce competition in Hong Kong, bludgeoning its share price.

PCCW shares trade 96 per cent below their 2000 peak.