Technology Company's Executive Chairman Tries to Avoid Limelight
2001-05-03
quamnet.com
Besieged by the media and irate investors, Richard Li, executive chairman of Pacific Century CyberWorks (PCCW), is trying to slip out of the limelight. While still actively involved in the company, Li and his advisers have decided a little bit of him goes a long way.
Unlike his father, Li Ka-shing, who rarely seeks public attention, Richard Li courted the press. He mounted the biggest takeover in east Asian history when he bid for C&W HKT just over a year ago. His shares were at a high of HK$ 28.
All that changed when Nasdaq started to decline. By August, when Li and some other PCCW executives sold PCCW shares at HK$ 16, just before the stock tumbled into a steep decline, he had fallen out of favour. On Friday, PCCW shares closed at HK$ 2.70.
The decision to recede into the background was taken a couple of months ago, but a row over whether Li had lied about his academic qualifications thrust him once again to the fore. An uncharacteristically humble apology by Li for this "misunderstanding" has not placated everyone -- some US investors are suing him.
Many in Asia perceive his decimated share price and tarnished reputation as a metaphor for the bursting of the technology bubble. Hence the scheme to erase the cult of personality and turn PCCW into just another telecommunications company, albeit the biggest in South-east Asia.
Part of the plan is to put in place experienced new blood. On Friday, PCCW announced Frederick Ma was joining the company as executive director responsible for "all present and future subsidiaries and associated companies of the group".
Ma has a long career in banking. That he spent most of the 1990s working for construction and contracting group Kumagi Gumi (now known as Hong Kong Construction Holdings) adds to his attraction because the Cyberport development -- a joint venture between PCCW and the Hong Kong government -- is gathering steam.
To lure Ma away from JP Morgan, Richard Li will transfer HK$ 20 million worth of PCCW shares owned by him privately to a company owned by Ma and his wife. Even though Ma's sign-on fee cost PCCW nothing, some bankers thought this was a bad example.
"It's mixing up church and state even more than it already is," an American investment banker said.
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