Chronicling Telecom Company Pacific Century Cyberworks' Problems
Aired May 17, 2001 - 08:30:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DALTON TANONAKA, CNN ANCHOR: Hong Kong's Pacific Century Cyberworks is denying media reports that it's looking to replace chairman Richard Li. PCCW's stock price closed nearly one-percent higher after the reports circulated. But at 2.75 Hong Kong dollars a share, that's a far cry from its peak above 28.50 early last year.
BIZ ASIA's Lisa Barron chronicles the telecom company's problems.
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LISA BARRON, CNN CORRESPONDENT (voice-over): Once again, the second son of Hong Kong's richest man grabs the headlines. And once again, it is not good news for Richard Li, chairman of telecom firm Pacific Century Cyberworks. This time, London's financial times newspaper reported on Wednesday that PCCW hired a headhunting firm to find a chief executive to replace the 34 year old Li. PCCW denied the report to CNN, saying it's hired several agencies to recruit new people to the board, but it's not actively looking for a new CEO.
Some analysts, though, speculate that may not be the entire story.
GENE GALBRAITH, ASIAWISE.COM: My suspicion is that somebody was contracted, that the journalist confirmed that fact, but that now PCCW is denying it. Perhaps they've fired the headhunter they hired, or perhaps the contract was not signed, and it was simply an indication. It sounds like somebody got caught out to me.
BARRON: Li himself told the FT he had no immediate plans to change his role, but said, "As a shareholder, if I feel someone else would be better at putting PCCW in the right shape for the long term, I would not hesitate."
The FT also reported that people close to the board said a search was under way for an experienced U.S. telecom executive to run the company, leaving Li to focus on strategy.
JEAN HYDELMAN, FINANCIAL CONSULTANT: I think he should concentrate on what he does best, and he is obviously brilliant at the big picture stuff. But maybe the minutiae of running some of the operations of a company that size, it would make sense to get some help in.
BARRON: Speculation surrounding Li's future comes just two months after he was forced to admit he hadn't earned a degree from Stanford University, as the company had claimed. PCCW has also faced setbacks under Li's chairmanship. Plans to develop the world's biggest broadband Internet business disintegrated. It posted a year 2000 loss of $886 million U.S. dollars, and it is the worst performer on the Hang Seng index.
GALBRAITH: This is the clearest indication yet that he wants to beat some kind of a tactful retreat from day-to-day management of that company.
BARRON (on camera): One analyst tells CNN he expects the youngest Li to take a largely ceremonial role if a new CEO takes over, which he says could possibly happen by the end of this year.
Lisa Barron, CNN, Hong Kong.
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