Hong Kong's Richard Li and His College Degree: Patrick Smith
By Patrick Smith
Norfolk, Connecticut, March 28, (Bloomberg) -- You know, I honestly don't much care that Richard Li, the Hong Kong 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. PCCW's stock, down 31 percent 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, the 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 Hong Kong 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.''
Part of Kit
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 Hong Kong friend put it during a recent visit?
It was evident from PCCW's 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 PCCW in a bit less than two years: Vast expansion, then flops and losses. The stock was the worst performer on the Hong Kong exchange last year, declining 72 percent.
A year ago last month, PCCW 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 percent drop in profit at HKT for the fiscal year that ended March 2000, analysts are predicting losses for PCCW-HKT in the year now ending.
George Tan's Story
But markets do love a story, don't they? Remember the George Tan story, those grandiose, enticingly half-known legends the Southeast Asian grifter spun around a bit of cardboard called Carrian Investments? Some readers will. And the honest among them will acknowledge that among the more odious parts of the tale was the blind faith of the lending bankers, many with very big names indeed.
I remember Tan especially well because he owned a house up on Victoria Peak just across from my old apartment. The apartment was shabby and the house grand. But I lived in my shabby apartment for many a year; Tan, so far as I know, never occupied his digs on Lugard Road. So are dreams sometimes never realized.
Let us not draw undue comparisons between George Tan, an outright crook, and Richard Li. This would be wildly irresponsible.
But still: George Tan's story was all about connections, and so is Richard Li's. That is to say, his story is all about a rather old way of doing business -- the way they don't teach much about in Palo Alto, California.
Change in Motion
There is a generational change well in motion in Hong Kong and Southeast 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-fertilizing 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 PCCW.
From Within
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 PCCW. As to the second question, we have to wait a little longer, perhaps.
Who knows? Richard Li may yet make a success of PCCW-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.
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