February 26, 2020 / 9:40 PM / a month ago

UPDATE 2-Senator Rubio seeks U.S. review of sale of AT&T unit to Czech-owned conglomerate

(Adds company response)

By David Shepardson

WASHINGTON, Feb 26 (Reuters) - U.S. Senator Marco Rubio on Wednesday asked the Trump administration to review the national security implications of AT&T's Inc's planned sale of its majority stake in Central European Media Group Enterprises (CME) to the Czech-owned conglomerate PPF Group.

Rubio, a Republican who chairs the bipartisan and bicameral Congressional-Executive Commission on China, wrote that the Czech company has a record of acting as "China's proxies inside the Czech Republic" and added that PPF-owned telecommunications firms are working with Huawei Technologies Co to develop 5G networks.

The CME Group operates in the Czech Republic as well as Bulgaria, Romania, Slovakia, and Slovenia, reaching around 97 million people and owns some of most-watched news programming in Central and Eastern Europe, said Rubio, who is also a member of the Senate Foreign Relations and Intelligence committees.

AT&T did not immediately comment.

PPF said in a statement it appeared Rubio was relying on "false information" from a Czech politician and disputed his characterization of CME's market. The company said it had only inherited Huawei's technology as part of its acquisition of the Norwegian telcom operator Telenor last year.

"PPF is buying CME as a complement to its telecommunications business, without any ulterior motives. As part of the process of acquiring CME, PPF Group is cooperating with all the relevant regulatory bodies, and we are providing them with all necessary information," the company said, adding it will reach out to Rubio.

Rubio said PPF's subsidiary, Home Credit, hired a public relations firm aimed at "manipulating Czech public opinion favorably toward China. This work included spying on Czech politicians, pressuring media to withdraw news articles critical of China, and creating a new think-tank, Sinoskop, to employ biased analysts to influence public debate."

He asked the Committee on Foreign Investment in the United States to review the transaction because it "undercuts U.S. national security interests related to Central and Eastern Europe, as well as to China."

The Trump administration added Huawei to an economic blacklist in May, citing national security concerns, and has lobbied foreign governments not to let Huawei take part in building 5G networks.

In October, AT&T said it would sell its majority stake in CME and receive $1.1 billion in cash and be relieved of a $575 million debt guarantee. AT&T acquired its stake in CME with the acquisition of Time Warner, now WarnerMedia, in 2018. (Reporting by David Shepardson; Editing by David Gregorio and Richard Pullin)

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