BIZ ASIA: PCCW Chairman Struggling to Stay Afloat Amid Rough Seas
Aired July 30, 2001 - 08:50:00 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.
LISA BARRON, CNN ANCHOR: He was once Hong Kong's golden boy, but a year of financial setbacks have taken its toll on the chairman of Internet and telecom giant Pacific Century Cyberworks.
As CNN's Andrew Brown reports, Richard Lee is struggling to stay afloat amid rough seas.
(BEGIN VIDEOTAPE)
ANDREW BROWN, CNN CORRESPONDENT (voice-over): Looks like it's going to be a long, wet summer. Hong Kong people have already dodged two large typhoons, but more storms are expected, and the last thing investors need is for another tech wreck to wash up on these shores.
The warnings signals have been hoisted. On July 26m local stocks slumped to their weakest level in more than two years. IT companies that once outperformed every benchmark in sight have been crushed.
And no one seeking shelter quite like Richard Lee. The formerly outgoing chairman of PCCW now rarely grants interviews and is tough to pin down at news conferences.
Earlier this year, "The International Herald Tribune" revealed Lee was a college dropout, something PCCW had failed to disclose in earlier statements. When the news broke, Lee reacted by sending his subordinates to face the press. And at another meeting on July 4, called to explain the firm's new Internet strategy, Lee fielded only a couple of questions from reporters before taking off.
The Silicon Valley-based PR company Hoffman said Lee's low profile has created a leadership void.
LOU HOFFMAN, THE HOFFMAN AGENCY: No matter how you cut it, there's going to be a certain amount reported on the company, and it's in your best interest to come up and articulate your plan.
BROWN: Of course that's easier said than done, particularly in a bleak economic climate with investors feeling miserable.
UNIDENTIFIED FEMALE: The stock jumps a lot.
UNIDENTIFIED MALE: Prices are going down like anything.
BROWN: And, no wonder, PCCW is swimming in debt, having borrowed billions of dollars to buy telecom assets from Britain's cable and wireless. It's reported net losses of nearly $900 million last March, and it is trying to keep afloat the technology businesses it founded or acquired during the tech boom.
Some analysts blame Richard Lee for failing to set a new direction for these operations.
Recently, Marshall Mays approached PCCW about a potential partnership to develop and online procurement system for the Internet. He says all he encountered at PCCW was chaos, and the deal went nowhere.
MARSHALL MAYS, EMERGENT: It's not as IF they're shunning procurement per se. They seem to have gotten no enthusiasm about any business. They're just experimenting right now.
BROWN: PCCW declined to be interviewed for this story. In the past, executives have defended the company by fighting its healthy cash flow and increasingly more cautious approach to investment.
Privately, the firm's also been telling the media, Richard Lee isn't PCCW's sole spokesman, and wants his senior colleagues to share the limelight. Critics of PCCW want him gone altogether.
HOFFMAN: It's time for Richard Lee to step down, and I appreciate that it will take some time to find a replacement, but this is a time for their number two person to step up and provide a bit of a bridge until the new person comes on board.
BROWN: Who would want the job, though? The tidal wave of public opinion that carried Richard Lee to new heights not so long ago has turned against PCCW. The summer of 2001's left Lee and many others at the mercy of the markets.
BARRON: Meantime, investors have other things to worry about, like the arbitrary well of nature.
Andrew Brown, CNN, Hong Kong.
(END VIDEOTAPE)
END
TO ORDER VIDEOTAPES AND TRANSCRIPTS OF CNN INTERNATIONAL PROGRAMMING, PLEASE CALL 800-CNN-NEWS OR USE THE SECURE ONLINE ORDER FROM LOCATED AT www.fdch.com
asia.cnn.com |
