Profile: Richard Li

By Sharanjit Leyl
BBC Asia Business Report

I believe it's important that Hong Kong does not become another Chinese city Richard Li

Hong Kong tycoon Richard Li's attempt at building a fortune of his own and stepping out of his father's shadow reads a bit like a soap opera.

Mr Li, the younger son of Li ka-Shing, Asia's wealthiest man, started by building a media empire with a multi-million dollar investment from his father.

His success in taking a local TV firm regional - beaming programmes as far afield as India - helped expand that empire.

Star TV offered Asia its first taste of satellite broadcasting in a region dominated by government media controls. He sold it to Rupert Murdoch's New Corp for $950m in 1995.

Two years later came the Asian financial crisis and deal-making hit a new low for the Lis and everyone else in Asia.

The internet and all its attendant possibilities took hold of investors near the turn of the new century and Mr Li rode the crest of the wave.

He sparked a frenzy in all things internet-related after buying a telecommunications equipment distributor and calling it Pacific Century Cyber Works with the intention of making it into Asia's leading internet firm.

His ambitious plans for the company reached a zenith when it beat Singapore rival SingTel to buy what was Cable and Wireless HKT in 2000. Today it is Hong Kong's largest phone company, but it never lived up to Mr Li's hopes when internet stocks plunged in 2000.

His various companies today still carry the moniker "Pacific Century" which hints that they are firmly entrenched in the telecommunications and media businesses of Hong Kong but many say they lack the missing link, namely China.

China threat

Of China, Mr Li admits in a recent interview with the BBC that there are "risks" despite the many success stories there. He thinks investors should go in with their eyes wide open.

If achieving the Hong Kong dream becomes a vanishing hope, then our society will suffer Richard Li

The rapidly growing mainland, he maintains, is like all other developing countries where the government is still making reforms in the business environment.

He also acknowledges Hong Kong's tenuous position as a special administrative territory of China.

"We have a transparent country, a free press. Even though anti-government newspapers have suffered on the revenue side and self censorship is evident in the past few years, we must look at these things carefully because when we lose it, the effect would be large."

Mr Li says he is "worried all the time" that Hong Kong will lose its relevance as a financial centre to China's burgeoning cities - Shanghai and Shenzhen.

"I believe it's important that Hong Kong does not become another Chinese city. Our cost is from a few times higher in some categories... to being 20 times higher in other categories such as low-end labour, so it's extremely important that we maintain our edge."

American concerns

But China is not his only worry these days.

Richard Li insists his father is peripheral to his wealth

Mr Li says Asia will not be impervious to the "phenomenon in the US" - the sub-prime crisis which is threatening to debilitate the world's largest economy and its major trading partners.

Hong Kong pegs its dollar to the greenback, and its central bank has been cutting interest rates in tandem with the US Federal Reserve, despite the very different economic environments of the two.

This is causing a property bubble that may threaten to burst as spectacularly as it did 10 years ago at the onset of the Asian Financial Crisis.

Mr Li has done well from his property investments in Hong Kong and elsewhere in Asia. His sale of the PCCW building in Tokyo for $1.7bn set a record for property in Japan.

But he isa reluctant to speak about them, perhaps because the subject evokes memories of a controversial land deal he inked eight years ago for prime waterfront land on Hong Kong island.

The deal - which did not follow the usual route of an auction - caused an outcry of cronyism from the public against the administration of then Chief Executive Tung Chee-hwa.

Mr Li christened it Cyberport. It is now a high-tech residential and commercial venture.

Rich man, poor man

But what irks him still are references to his father Li ka-Shing, chairman of two of Hong Kong's biggest companies - Cheung Kong and Hutchison Whampoa.

Richard Li's public relations team take great pains to point out that a loan he took from his tycoon father to purchase Star TV was paid back with interest.

When his father sought to indirectly bail him out of a tangled financial transaction involving his attempts to sell his stake in PCCW in 2006, Richard Li professed irritation.

Perhaps because of his moneyed credentials, Mr Li says he is growing increasingly uneasy about the widening gap between rich and poor in Hong Kong.

According to a recent Gini co-efficient - a measure that gauges the divide between rich and poor - the gap between the haves and have nots in Hong Kong is the widest in the world.

Mr Li says the divide has the potential to hit Hong Kong's competitiveness and social stability.

"If achieving the Hong Kong dream becomes a vanishing hope, then our society will suffer.

"What would the Hong Kong dream be? It's no different from the American dream whereby an everyday man on the street who works hard, would be able to make good savings and use those savings as equity for their future small business," he explains.

Hong Kong's low incomes and extreme high costs have become a bighurdle stopping most of the population getting into business.

As such not only the stability factor would be hit, but it would affect all of Hong Kong, and its competitiveness and innovation would be weakened. Big businesses would suffer from less competition and we would be less on our toes in terms of our competitiveness.

On his toes

Mr Li has never hidden his ambitions to re-enact the fervour of his internet heyday.

One of his latest ventures in recent years is Now Broadband TV.

It is an internet protocol television (IPTV) venture offering a selection of channels on the internet at a fraction of the cost of traditional cable providers.

He says he has been "lucky" - the venture is now the largest internet TV provider in the world but also credits that to setting the groundwork for it over the years.

"We had been busy building up fibre infrastructure under the ground in Hong Kong and underneath the homes of people so when we launched IPTV, it was relatively smoother sailing than in other territories," he says.

His enthusiasm for all things media related is also evident in the pride he displays at the activities of fellow Hong Konger and friend Winnie Yu.

Ms Yu, a well known radio personality in Hong Kong and the deputy chairman of Hong Kong Commercial Radio is heading a project in the territory's poorest district, Tin Shui Wai, helping underprivileged children try out at radio and TV stations - training that will eventually result in a job in media.

"I just got a text message from her that the team she brought together from Tin Shui Wai has won an anti-drug campaign from the government led by the attorney general's office," Mr Li says.

He admits self depreciatingly that even though he was not patient with books, it is comforting to know that other youngsters are getting the chance to get where they want to be by applying themselves in other areas.

Mr Li was famously found out for not having graduated from Stanford University despite assertions by PCCW that he had.

Superboy

The man once dubbed "Superboy" by the Hong Kong press for being the son of "Superman" Li, has come a long way

These days, he is far more scrutinized in the local press for his alleged affair with a young and upcoming Hong Kong actress.

He is also called a "super diamond bachelor" for remaining notoriously unmarried. It is a popular term used to describe any unclaimed male worth a lot of money, and in Mr Li's case, he earned the adjective "super" for being worth more than $1bn.

Mr Li continues to expand his media empire with his latest acquisition, the much lauded Hong Kong Economic Journal, for which he paid $35m for a 50% stake last year.

The Journal, which has been a mainstay in Hong Kong for 33 years, may be just the ticket in combining his passions for old and new media.