HK cyber-tycoon steps aside

Richard Li's father is one of Hong Kong's richest men

Richard Li, the Hong Kong billionaire's son who made Pacific Century Cyber-Works into an internet and telecoms powerhouse during the dot.com boom, is giving up the top job.

The 36-year-old Mr Li is stepping down from the chief executive's role in favour of Jack So, head of Hong Kong's MTR subway network, but is staying on as chairman.

At its peak, PCCW was a key player in the telecoms market, stunning investors with its purchase in 2000 of Cable & Wireless's HKT Hong Kong phone monopoly for US$28.5bn (£16.9bn).

But that was at the height of the market. Since then, PCCW's shares have lost 96.5% of their value, and debts incurred during the good years forced it to sell its mobile phone arm.

Still, Mr Li's departure from the firm he founded sparked a rally, pushing PCCW stock up 5% in early trading before the shares settled down to a 1% gain at HK$5.40.

Control

Mr So's main job will be to continue paying down the firm's debts - and to try to deal with the steady decline in the fixed-line phone revenues on which it increasingly relies.

But doubts remain as to whether he will really have a free hand, since Mr Li - who founded the business on the back of the Star satellite TV empire he built on a loan from his father, tycoon Li Ka-shing - still controls 37% of PCCW's shares.

And some investors are also concerned that having a non-telecoms executive in charge is a bad idea.

"(The appointment of Jack So) will push me further away because now I have to deal with a new head again," said James Cheng, director of Asia Strategic Investment Management Ltd.

"I don't know what he's going to do. If the top guy is not a telecoms guy, what does that mean?"