Family Feud: Richard Li and Li Ka-shing
The sale of PCCW brings out the bad blood between Richard Li and Li Ka-shing.
The worst kept secret in Hong Kong’s corporate world is no longer a secret. By his own indirect admission, Richard Li has confirmed what many have suspected for a long time, that he absolutely cannot get along with his father Li Ka-shing.
In Hong Kong, it is well known that Richard was much closer to his late mother while his elder brother Victor is the splitting image and alter ego of his father. Richard is a bachelor who stays on his own. Victor, married with three kids (and, finally, a son, much to the pleasure of Li Ka-shing) lives with his father in a huge mansion.
Even the career of the two men reflects this: Victor is his father's No.2 in almost all the businesses, from property developer Cheung Kong to port-to-telecom conglomerate Hutchinson Whampoa. Richard, who admittedly took money from his dad on more than one occasion, has gone his own way, first in setting up the satellite television operator Star, which he sold to Rupert Murdoch, then in taking over the giant Hong Kong Telecom and folding it into his cable TV and telecom concern, PCCW.
Despite this, there is always the impression that, when it comes to the crunch, the Li family will close ranks and stand together. This notion has now been dispelled following Richard Li’s attempt to sell PCCW.
The deal is complicated and, frankly, not worth all the attention unless one is intrigued by the endless machinations of Chinese politics. (PCCW is a political issue because it is Hong Kong’s biggest telecom provider and China is loath to see it fall into foreign hands.).
To cut a long story short, Richard Li wants to get out of PCCW and focus on the new media, mainly online content providing. He has found a few potential buyers, unfortunately none of them are Chinese.
Beijing threw a tantrum, which put Li Ka-shing, who is on close terms with the leaders there, in a difficult position. Suddenly the senior Li’s trusted lieutenant Francis Leung, an investment banker, stepped in and signed a deal to take PCCW out of Richard’s hands. There was much speculation that Leung was merely acting on the behalf of the senior Li in his attempt to placate China.
After a whole barrage of ingenious non-statements to the contrary, it emerged that, yes, the senior Li is indeed involved and he will take up a big chunk of PCCW shares if the sale goes through. (This depends on a shareholders’ vote in a holding company in Singapore.)
So far it looks like the father bailing out the son. But Richard has given a totally different spin to the matter. In an interview with a Chinese paper, he expressed unhappiness with Francis Leung (the hapless Leung h
ad been acting very gentlemanly and did not respond to the accusations.) If this is not bad enough, Richard concluded the interview by voicing his hope that the sale of PCCW to Leung (in fact, to a consortium led by his father) would fail.
This is the first time Richard defied his dad in the public. From a Chinese perspective, this is an absolute no-no, as this leaves Li Ka-shing with little 'face' in the matter, and face often matters more than commercial concerns in Chinese business.
Is PCCW the only trigger? Perhaps not. Richard, apparently, has never liked his dad’s girlfriend, Solina Chau, who directs the Li Ka-shing foundation and was recently named by the Asian Wall Street Journal as one of the "50 Women to Watch" in Asia. Recently Li senior has openly talked about marrying Chau. For Richard, who is still grieving over his mother’s untimely death, it could have been the last straw that prompted him to speak out against his father.