New World takes legal action against Davnet

In its effort to blame New World Development for the breakdown of plans to take a stake in the company''s telephone business, Davnet of Australia may have stirred up more trouble than it bargained for.

New World Development, one of Hong Kong's largest real estate developers, plans to sue Davnet after the Australian telecommunications company called off talks to buy a 74% stake in New World's fixed line telephone business, claiming it was losing revenue, market share and staff.

Melbourne-based Davnet said yesterday that New World was not as valuable as it thought. It said the company was losing out to competitors and suffering from staff defections and low morale. New World vigorously denies the claims.

We categorically deny the allegations made in the statements that there has been any rapid depletion of quality employees and staff morale in New World Telephone, the company said in a statement....

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