Proving the unprovable -- with Dad's help
By Patrick Smith
I HONESTLY don't much care that Richard Li, the Hongkong princeling who founded Pacific Century CyberWorks, never earned a computer engineering degree from Stanford University, as his company has routinely claimed he did.
This bit of news caused a considerable stir when the International Herald Tribune broke it late last week. CyberWorks' stock, down 31 per cent this year, took yet another hit. Li quickly issued a denial: my staff made the mistake, he claimed. But, of course, they did. Then Richard's father, billionaire Li Ka-shing, got pulled into the picture. "Richard is absolutely not a person who tells lies," the famed property magnate said at a news conference.
What difference does a degree make? Puffing up the curriculum vitae, from all I've heard, is standard operating procedure in Silicon Valley and other places where the New Economy has its highest concentrations of Moonie-esque followers. No, the unlettered Li has plenty of company on this point, if not necessarily good company. And I would neither buy nor sell stock on this sort of revelation. But the degree scam is telling in another respect. For many of the young, wealthy scions of Hongkong's biggest business execs, a sheepskin from an institution such as Stanford is an amulet of a sort. And it bears a certain message. "I've broken from the past, and I don't depend upon inherited wealth and passed-on power," it says. "I'm no scrappy, dawn-to-dusk maker of yarn or plastic flowers. I know what 'inventory control' means and I manage my company the modern way."
It's part of the kit, in short. And Richard Li has always made much of the kit and the semiology that attaches to it. He's not alone on this point, either, of course. But haven't Richard Li and others of his generation set out "to prove the unprovable", as an insightful Hongkong friend put it during a recent visit? It was evident from CyberWorks' founding in August 1999 that Li the elder stood behind the newly created throne. The independence thing was always a bit of a game; the emperor, so to speak, was very well clothed. And look at what has happened at CyberWorks in a bit less than two years: vast expansion, then flops and losses. The stock was the worst performer on the Hongkong exchange last year, declining 72 per cent.
A year ago last month, CyberWorks purchased Hong Kong Telecommunications and, for the moment anyway, Li's company boils down to a telecom operator. But a new set of numbers are due later this week at HKT, on which Li now depends for cash flow. After a 90 per cent drop in profit at HKT for the fiscal year that ended March 2000, analysts are predicting losses for CyberWorks-HKT in the year now ending.
Richard Li's story is all about a rather old way of doing business -- the way they don't teach much about in Palo Alto, California. There is a generational change well in motion in Hongkong and South-east Asia. It is rich in its implications and it's fascinating to watch. It has to do with learning and accepting new ideas and re-fertilising business culture. In the end, it has to do with throwing out what's no longer of any use, while being wise enough to keep from traditional practices what's worth keeping.
There's no place for denying the past in any of this -- or the present, for that matter -- and no place for spun myths. Richard Li, by most accounts, was rather restless when, in 1989, Li the elder called him back from Canada, where he had been merchant banking (in an operation his father had a share of). Li the younger went to work for Hutchison Whampoa Ltd (one of his father's companies) and would walk brattishly out of meetings that held no interest for him. He eventually left to run Star TV (another operation his father had a stake in), and then came CyberWorks.
One must now wonder about all this. Was there ever really a break with Dad? Could there ever have been? The answer to the first question is no; for my money, that was made unassailably clear last month, when Li Ka-shing, via Hutchison, took a small, confidence-boosting stake in CyberWorks. As to the second question, we have to wait a little longer, perhaps. Who knows? Richard Li may yet make a success of CyberWorks-HKT, all on his own. Life is long, and at 34 he has a lot of it left. But he may have proven the point he is desperate to make by staying where he was. Sometimes change is most genuinely effected, and new thinking best manifest, from within. -- Bloomberg
The writer is the author of 'Japan: A Reinterpretation'
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