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Editorial
The significance of the HKT takeover
PACIFIC Century CyberWorks yesterday successfully defeated Singapore Telecom, which had the backing of the media tycoon Rupert Murdoch, in its takeover bid for Cable and Wireless HKT, thus creating an enterprise with a market value of nearly HK$600 billion.
While Richard Li Tzar-kai's success can be ascribed to his acumen, financial expertise and family background, we must also take into account a more important underlying factor, which is that the development is in accordance with the global trend of information technology. At the same time, his success has unavoidably deepened public anxiety about the immense economic influence the Li family exercises in Hong Kong, and it is surely time the government quickened the pace of antimonopoly legislation.
On the face of it, the takeover represents the ascendancy of local capital over Singapore capital, and the replacement of British capital by Chinese capital. But the fact is that it reflects a new trend in the development of international enterprises today. As the world travels rapidly into the era of information technology, an enterprise may achieve spectacular growth even though it has very limited assets and almost no business performance to speak of. As long as the public subscribe to its technological concepts, it can through takeovers and amalgamations give substance to its virtual reality and gobble up corporations bigger than itself and with real assets and concrete performances.
In no more than a year after its establishment, Mr Li's CyberWorks has developed into a multinational enterprise by means of takeovers as well as equity financing and loan raising on a large scale. This is because Mr Li has been able to grasp the trend of information technology and, drawing on his financial expertise, made good use of market forces. Europe and America abound with similar enterprises developed at speed. The success stories of Microsoft and Yahoo! in the United States furnish two noted examples. The Sunday Times of Britain last year named the top 1,000 wealthiest people in the country, of whom 96 were from the high-tech world; and of those aged under 30, one-third had made their fortunes in the field of advanced technology. All this shows that the modern trend of information technology can work miracles of rapid business development like that of Jerry Yang's Yahoo! and Mr Li's CyberWorks. No end to this trend is in sight, and the future has in store for us lots of suchlike business miracl
Mr Li's victory in the HKT takeover battle means a very substantial increase in his assets. This inevitably leads to worries on the part of the public that an excessively powerful Li family may affect Hong Kong's normal economic development. For CyberWorks, which now has taken over HKT, Cheung Kong (Holdings) and Hutchison Whampoa together boast a market capitalisation that amounts to a quarter of the total value of all Hong Kong stocks. The Li family's influence is particularly felt in certain economic fields. For instance, the family enjoys a share of more than 50% of the mobile communication market. Although Li Ka-shing declared that for Hong Kong he cherishes "only love, and no ambition", and that overseas markets are the major arena of his business activities as well as the major source of his business profits, people are still worried. It is feared that the Li family, with its great commercial empire and its big share of the Hong Kong market, may come to monopolise the economy. Such fears are dif
We are therefore convinced that the government should speed up its work in the preparation and introduction of antimonopoly legislation. The Commission on Strategic Development has recently released a report suggesting the establishment of antimonopoly regulations. The government must quickly act on this suggestion so that untoward developments may be avoided. The consumer's interests can hardly be protected unless measures are taken to ensure that there is a lot of competition within every economic sector.
March 1, 2000
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