Li empire spreading in Hong Kong

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Fri Mar 3 05:55:42 PST 2000


2 March 2000

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
|Disclaimer|
For comments and feedback send Email © Bennett, Coleman & Co. Ltd. 2000.



More information about the lbo-talk mailing list