Li empire spreading in Hong Kong
HONG KONG: With the takeover of the territory's big phone company by an
Internet startup owned by Richard Li, the youngest son of billionaire Li
Ka-shing, the tentacles of the Li empire will reach deeper and wider into
Hong Kong.
Some critics expressed worries today that the Li family is getting too
powerful in tiny Hong Kong, a day after the younger Li's Pacific Century
CyberWorks Ltd. sealed a deal to buy Cable & Wireless HKT in Asia's biggest
corporate takeover.
The buyout that thwarted a bid from Singapore Telecommunications Ltd "is
another step along the road to the renaming of Hong Kong as Li Land
Incorporated," the English-language daily South China Morning Post said in
an editorial. "There're bound to be concerns about such economic dominance
by a single family".
Li Ka-shing's Cheung Kong Group controls four of the 33 blue chips listed on
Hong Kong's blue chip Hang Seng Index.
Li's group owns a vast portfolio of properties, retail chains, one of Hong
Kong's two power suppliers, the territory's largest mobile phone network and
the world's largest container port operations.
Grab a cup of coffee, and the beans were likely imported through a container
port owned by Li, bought from his grocery store, and brewed in a coffeemaker
from his electronics retail chain with power from an electric company he
controls.
Go to the downtown Central District and one will likely set foot in some
prime real estate Li developed. When a cellular phone rings, there is a
one-in-three chance that it's from a Li-run network.
Perhaps it is only coincidence, but Li Ka-shing, in Cantonese, is pronounced
the same way as `Li Family City'.
As the phone deal cut by the 33-year-old Li dominated headlines today in
Hong Kong, another new venture from his father that had captured the town's
attention last week was busily booming ahead on the stock market.
Hundreds of thousands of citizens flooded local banks last week to grab
application forms for the initial public offering of shares in a Li Internet
venture, tom.com creating such a traffic jam that stock regulators had to
complain.
While the shares were still up for grabs in the IPO, a huge sign flashed
tom.com's name nightly on the Cheung Kong skyscraper that is one of Hong
Kong's tallest buildings. The stock debuted today by soaring to more than
four times its initial price of 23 cents.
The younger Li's telecoms deal will add another blue chip firm and some
important assets to the family empire. Cable & Wireless HKT controls 97
percent of the fixed-line telecommunications market, with substantial
Internet and mobile phone interests.
After the takeover, the family's holdings will take up roughly a quarter of
the stock market's capitalization of $631 billion.
"They're getting really powerful," said lawmaker Fred Li of the opposition
Democratic Party.
Laura Cheung, a spokeswoman at Hutchison Whampoa Ltd., which controls the
Cheung Kong Group's key telecommunications business, rejected suggestions
that too much power is concentrated in the hands of the Lis.
Pacific Century CyberWorks is run separately from the Cheung Kong Group, and
they even compete in some areas, she said.
Lau Siu-kai, a political analyst at Chinese University, said it would be
difficult for anyone, even Li, to dominate an open market such as Hong Kong.
Still, Lau said the government may "try even harder now to quash
speculations that it is allowing Hong Kong to become Li Inc".
Li Ka-shing, Hong Kong's richest man and a well-respected entrepreneur and
philanthropist, reportedly is a good friend of the territory's political
leader, Chief Executive Tung Chee-hwa. Li also enjoys close ties with
Chinese leaders in Beijing.
Richard Li emerged from his father's shadow in the 1990s, when he sold
StarTV, Asia's top satellite TV company he started with a capital of $125
million, to media mogul Rupert Murdoch for $950.5 million.
In 1998, the younger Li gained the right to develop a piece of government
land into an industrial park, Cyberport, which aspires to become Hong Kong's
answer to Silicon Valley.
The deal generated accusations of government favoritism after Li's Pacific
Century Group bypassed the normal bidding procedures to win the development
rights. (AP)
For reprint rights: Times Syndication Service
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