Telecoms provider IDT has bid $225 million for Global Crossing.

International telecommunications provider IDT has made a $225 million bid for the assets of Global Crossing, and has raised the issue of national security to fend off the rival takeover attempt from Hong Kong-based Hutchison Telecommunications and Singapore Technologies Telemedia.

Would we give the keys to the Justice Department buildings or the board rooms of some of our largest corporations to a foreign government so they could listen in? Absolutely not. The idea is absurd, said IDT chairman Howard Jonas.

Yet a foreign telecommunications company, based in communist-controlled China, is asking our government for control of Global Crossing, which would give them access to some of our government’s and major corporations’ most sensitive phone conversations, he said.

Mr Jonas’ use of such language, unfamiliar since the ending of the cold war, is designed to sabotage the deal approved by the bankruptcy court in August 2002 under which the two Asian companies will pay $250 million for a 61.5% stake in Global Crossing. Since then, there have been rumblings from right-wing politicians about the deal, but no indication that the US government would block the acquisition.

The deal still has to be approved by the Federal Communications Commission and a US government body that investigates overseas takeovers for security concerns. It has almost certainly asked the two Asian companies for guarantees over security, but a final decision has yet to be taken.

If the US government blocks the deal, it could have knock-on effects on the huge investments that Western companies are pouring into China and the large orders that have been secured for providing equipment for its fast-expanding communications infrastructure.

Its intervention in the Global Crossing saga comes late in the day, but the fact that IDT’s CEO James Courter is a former Republican congressman suggests that it might know how to pull the right political strings.

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