NBA China, valued at about US$2.3 billion, is being run by former Microsoft executive Tim Chen, who was appointed last September. It will be governed by a board of directors that will include representatives from the investors, as well as current NBA team owners and league officials.

NBA China will have the right to create teams in the country, and own all broadcasting and merchandising rights.

'The opportunity for basketball and the NBA in China is simply extraordinary,' NBA commissioner David Stern said in the release.

'The expertise, resources and shared vision of these immensely successful companies will help us to achieve the potential we see in the region.'

The NBA's popularity has grown in China with the success of Yao Ming, the NBA's top draft pick in 2002. The Chinese sports ministry says basketball is played by 300 million people in the country and is the most popular sport among youths.

The NBA has 16 marketing partnerships with China-based corporations and US-based companies doing business in China. It opened an office in Hong Kong in 1992 and employs 100 people in four offices in China.

Hutchison, a conglomerate controlled by the Hong Kong billionaire Li Ka-Shing, increased size of the sale - already the largest ever global debt deal in Asia excluding Japan - from $3 billion, said the people, who requested anonymity. It would be the largest-ever corporate bond offering by an Asian company outside of Japan.

Hutchison has spent about $14 billion on high-speed mobile phone networks since 2000. It intends to use the proceeds to refinance debt. The company has about $2.9 billion of debt coming due in 2004, according to Bloomberg data.

Hutchison has divided the dollar-denominated offering into three portions with maturities of seven, 10 and 30 years. Investors are being offered a higher yield than companies with similar credit ratings to compensate investors for the risks of its so-called third-generation, or 3G, cellular business.

"Hutchison's investments in 3G introduce higher risks, which means they need to pay more," said John Teng, a fixed income analyst at Nomura International (Hong Kong). "There's a chance of a credit downgrade because of their exposure to 3G.

Hutchison has already borrowed about $4.5 billion from investors this year in four separate global offerings.

"They need to borrow to be able to do acquisitions and build the business," said Kunalan Sivapuniam, a fund manager at Chinkara Capital in Singapore

Hutchison said in bond-sale documents that there were no assurances that it would be able to fulfill its plans for 3G phone services, or that competition from lower-priced alternatives would not supercede 3G technology. 

Hutchison's 3G businesss had a 3.9 billion Hong Kong dollar, or $500 million, first-half loss, limiting the company's overall profit growth to 2 percent. Hutchison's credit rating was cut to A-minus in June by Standard Poor's because of the financing requirements

The willingness of investors to lend money to Hutchison stems in part from its other businesses, which span ports, retailing, real estate and oil. The group controls 14 percent of the world's container trade, three-quarters of Europe's biggest port operator and is China's largest foreign container operator.

"The fears over 3G are a bit overblown," said Desmond Soon, a fund manager at Pacific Asset Management. "The rest of the business - the cash cow - is stable."

The banks are testing investor demand for about $1.5 billion of Hutchison bonds maturing in as long as 30 years, bankers involved said Monday. The ports and telecommunications company controlled by the Hong Kong billionaire Li Ka-shing has already sold $4.5 billion of bonds overseas this year, hiring one bank to manage each of the four offerings.

HSBC managed two of those sales, giving it top slot so far this year with $3.3 billion of global debt sales for companies in Asia excluding Japan, according to Bloomberg data. Merrill Lynch handled one and is currently in second place with $2.5 billion worth of bond deals, and Goldman managed one and is fifth with $1.4 billion of bond sales. Top rankings help banks win business.

"Banks will be aggressively pursuing this opportunity to improve their league table position," said Frits Jan Algera, a debt banker at ABN AMRO Holdings in Hong Kong.

"It's a good time for Hutchison to sell bonds as rates are relatively low and demand for its credit is high."

A higher league table ranking may give a bank an edge when bidding to manage planned sales by the governments of Malaysia, Indonesia and the Philippines, as well as such companies as Korea Electric Power, Korea Gas and Pertamina, Indonesia's state oil company.

Bankers at the firms that are heading the league tables declined to comment. Laura Cheung, a Hutchison spokeswoman, also declined to comment.

Hutchison may be tempted into a fifth bond sale because it needs to fund new phone services and has $2.8 billion of debt maturing next year.

Goldman bought the securities in advance, shouldering the risk that they would decline before investors bought them, bond-sale documents show. It did not collect an underwriting fee, according to the documents.

Two months ago, Merrill Lynch Co. earned $29 million for arranging a $1.5 billion bond sale by the Hong Kong communications and property conglomerate controlled by the billionaire Li Ka-shing.

Hutchison's bond sale "is a loss leader" for Goldman, said Henry Lee, founder of the investment firm Hendale Group, which manages $100 million. "They were snubbed by Li in February and needed to do something to get back into the frame."

Hutchison, whose businesses range from ports to European mobile-phone networks, has been a Goldman client for a decade. Li's companies have paid about $250 million in fees in the past five years, bankers said. Hutchison has accounted for more than a third of the $6.8 billion worth of global bonds sold by Asian companies outside Japan so far this year, Bloomberg data show.

Arranging the Hutchison bond sale made Goldman the second-ranked manager of global debt offerings in Asia outside Japan this year, up from 16th in 2002, according to figures compiled by Bloomberg. Merrill Lynch is ranked number one.

Michael Carr, Goldman's head of Asian investment banking, was not available to comment Wednesday. Spokespeople for the bank declined to comment.

In two previous bond sales, Hutchison paid 0.45 percent of the total proceeds in fees. Goldman's sale was a reopening of an earlier issue of 10-year securities arranged by Merrill Lynch. Fees on such secondary transactions are typically lower because the legal, promotional and administrative work has already been done.

Hutchison Whampoa managing director Canning Fok Kin-ning continues his reign as the city's highest paid executive at a public company, taking home a total of HK$130.94 million - of which HK$119 million was a bonus - in 2006.

His boss, Li Ka-shing, continued with tradition and took home a token director's fee, but earned dividends of close to HK$2.2 billion from his property flagship Cheung Kong (Holdings) in 2006.

Although Mr Fok's total payout was slightly lower than that of 2005, it reflects the general mood of the financial services sector, where salaries have been among the best ever over the past 12 months.

Hong Kong's high roller
Canning Fok is still adamant that his massive bet on 3G telecoms services will pay off

2005 January 6  from the print edition
In a  city with a passion for gambling, it is fitting that the biggest bet in Hong Kong's recent history has been laid by its top company: Hutchison Whampoa has staked $22 billion on the global success of third generation (3G) mobile-phone services.

Though Hutchison is controlled by Li Ka-shing, Asia's richest man, and his son Victor is deputy chairman, the investment in 3G, which (among other things) enables users to download music and make video calls on their phones, has become associated with Canning Fok, the group's managing director for the past 12 years and a long-time aide-de-camp of Mr Li senior. Given the huge cost of buying licences and building infrastructure, start-up losses and early setbacks—clunky handsets, patchy coverage and slow data downloads—it is not surprising that the 3G adventure unsettled investors. Eighteen months ago it strained the finances of Hutchison, a ports-to-property-to-retailing conglomerate with nearly $19 billion in revenues and almost $2 billion in net profits in 2003, and even threatened Mr Fok's job.

Today, the rotund 53-year-old with a trademark pudding-bowl haircut has regained his boyish grin. Subscriber numbers in Britain, Italy and several smaller countries—which failed to hit his predicted 1m by the end of 2003—soared to almost 6m in December 2004, well above forecasts. “Demand is tremendous,” boasts Mr Fok. He demonstrates new, improved 3G handsets with childlike enthusiasm. “This LG model is selling like hotcakes,” he says, calling up the latest soccer scores and a live video clip of Hong Kong's traffic jams while dismissing this reporter's PDA-phone: “I don't believe in handheld computers.”

Mr Fok spends 60% of his time on 3G, checks updated subscriber figures every two hours until his bedtime at 2am and accuses the media of being too “emotional” about the issue. But he feels good about the decision to plough the nearly $20 billion windfall Hutchison made from selling Orange, its 2G telecoms operator, to Germany's Mannesmann (it was later sold on to France Telecom) in 1999 at the peak of the telecoms boom, straight back into 3G—which he says will make its first operating profit in 2006.

Many industry experts remain sceptical. Hutchison is courting subscribers by subsidising handsets, even giving away some phones, as well as offering free minutes, free text messaging and low-margin pre-paid plans. “It is easy to get carried away with the subscriber numbers. We are concerned that Hutchison won't make an economic return in this decade,” says Chris Alliott, an analyst at Nomura, an investment bank.

And as the cost of acquiring a 3G customer rises (to €270 in November from €252 in July) Hutchison's annual average revenue per user is falling—from €51.5 to €44.5 in the same period. Another analyst says that subscribers mainly want Hutchison's 3G service because it offers the cheapest voice telephony, not for its lucrative data downloads, and that average revenue figures are misleadingly reported “gross”, before discounts. One Hong Kong tycoon, a friend of Mr Fok, is unconvinced: “3G is a gamble that I don't think will work. Who really wants video conferencing? Think how disastrous it could be for Hong Kong men if their wives call when they are with their mistresses. And I don't want business partners seeing who else I am doing deals with.”

Hutchison has been discounting so aggressively to capitalise on its early launch by locking in customers. But since November it has faced increased competition in Europe from Vodafone, the world's leading wireless provider, and two of the other five mobile operators in Hong Kong—SmarTone and CSL—launched 3G in December. Partly as a result, Cusson Leung, an analyst at Merrill Lynch, expects Hutchison's 3G operations to make an operating loss of $1.3 billion in 2006—when Mr Fok expects to be in the black—plus almost $1 billion in associated interest costs.

Even though Hutchison would be big enough to shoulder such a burden, it is hard to shake the impression that its obsession with 3G has distorted management priorities. Analysts accuse the group of selling some of its best assets, such as its stake in Procter & Gamble's Chinese consumer goods operation, to produce exceptional gains and so compensate for 3G losses—something Mr Fok denies. The group's stake in Canada's Husky Oil, highly profitable at current prices, may be on the block next, reinforcing Hutchison's reputation as an asset trader rather than a builder of businesses. Mr Fok bristles at that description.

In response to such criticisms, Hutchison has tweaked its strategy, floating minority stakes in various businesses to raise money while retaining control. For instance, most of its smaller telecoms operations, grouped as HTIL, now have a minority stake listed in Hong Kong. In December, Mr Fok talked about an early flotation of its Italian 3G business. Hutchison claims that such financial engineering reveals to investors the hidden value it has created. But the fact that its shares trade at just 1.2 times net asset value and at a discount to the Hong Kong market average suggests that the conglomerate pays a price for its complexity.

An arguably even bigger criticism relates to the opportunity costs associated with 3G. With China on its doorstep and Mr Li's excellent connections there, Hutchison could surely have invested its Orange windfall more profitably on the mainland, where it already has property, infrastructure and retailing interests. Mr Fok says it is expanding as fast as it can in China. But that is probably true only of ports. Though it is growing in retailing, for instance, Hutchison still owns only 27 supermarkets and 100 drug stores on the mainland, compared with 3,500 stores in Europe. In property and in building materials, other Hong Kong investors, such as Vincent Lo's Shui On group, have pulled ahead. Hutchison's bet on 3G is not the disaster it threatened to become a year ago. But Mr Fok surely has more long nights ahead. - 2005 January 6      THE ECONOMIST

Fok tops Hutchison wage list at $343,150 per day
Hutchison Whampoa group managing director Canning Fok Kin-ning, long reputed to be Hong Kong's highest-paid executive, made $343,150 every day last year - a fact revealed yesterday when the Li Ka-shing-controlled conglomerate became one of the first blue-chip companies to list directors' pay by name.

The company's annual report, released online yesterday, shows Mr Fok made $125.28 million last year. His boss, Cheung Kong and Hutchison chairman Mr Li, made $60,000 for the whole year - all from director's fees.

Mr Li is understood to make a lot more money from his share-trading activities.

Hong Kong's median monthly wage is $9,500.

Mr Fok's pay package, which included a $113.5 million bonus on top of a salary of $9.77 million, accounted for 48.2 per cent of the money Hutchison spent on its directors.

Mr Li's eldest son, Victor Li Tzar-kuoi, had a higher salary as managing director of Cheung Kong - $27.62 million - but trailed badly in the bonus stakes, picking up $30.52 million from Hutchison and a relatively paltry $4.36 million from Cheung Kong. Including the $4.44 million he was paid in salary as deputy chairman of Hutchison, Victor Li made a total of $69.78 million last year.

Mr Fok, the chief spokesman and salesman for Hutchison's troubled global third-generation mobile-phone roll-out, does not appear to have earned a pay rise last year. In 2002, he was understood to have made between $125 million and $125.5 million.

Hutchison's deputy managing director, Susan Chow Woo Mo-fong, made $34.46 million last year, including $26 million in bonus payments, while finance director Frank Sixt made $32.67 million.

The listing of directors' pay by name in annual reports became mandatory from Thursday under stock exchange listing rules implemented after more than two years of heated debate.

In the past, companies were only required to disclose the pay of top directors in band form without identification, a policy lagging international standards that was criticised for lacking transparency.

The exchange introduced the change despite fierce opposition from many company directors, with some arguing that disclosure of pay by name could make them kidnap targets. In May 1996, Victor Li was kidnapped in Deep Water Bay Road. He was released a day later after a ransom was paid.

Hutchison Whampoa group managing director Canning Fok Kin-ning, long reputed to be Hong Kong's highest-paid executive, made $343,150 every day last year - a fact revealed yesterday when the Li Ka-shing-controlled conglomerate became one of the first blue-chip companies to list directors' pay by name.

The company's annual report, released online yesterday, shows Mr Fok made $125.28 million last year. His boss, Cheung Kong and Hutchison chairman Mr Li, made $60,000 for the whole year - all from director's fees.

Mr Li is understood to make a lot more money from his share-trading activities.

Hong Kong's median monthly wage is $9,500.

Mr Fok's pay package, which included a $113.5 million bonus on top of a salary of $9.77 million, accounted for 48.2 per cent of the money Hutchison spent on its directors.

Mr Li's eldest son, Victor Li Tzar-kuoi, had a higher salary as managing director of Cheung Kong - $27.62 million - but trailed badly in the bonus stakes, picking up $30.52 million from Hutchison and a relatively paltry $4.36 million from Cheung Kong. Including the $4.44 million he was paid in salary as deputy chairman of Hutchison, Victor Li made a total of $69.78 million last year.

Mr Fok, the chief spokesman and salesman for Hutchison's troubled global third-generation mobile-phone roll-out, does not appear to have earned a pay rise last year. In 2002, he was understood to have made between $125 million and $125.5 million.

Hutchison's deputy managing director, Susan Chow Woo Mo-fong, made $34.46 million last year, including $26 million in bonus payments, while finance director Frank Sixt made $32.67 million.

The listing of directors' pay by name in annual reports became mandatory from Thursday under stock exchange listing rules implemented after more than two years of heated debate.

In the past, companies were only required to disclose the pay of top directors in band form without identification, a policy lagging international standards that was criticised for lacking transparency.

His boss may be richer but Canning Fok, managing director of Hutchison Whampoa Ltd, continues to do well for himself.

Li Ka-shing's right-hand man is believed to have been paid about HK$125 million (S$28 million) in 2002, a 19 per cent raise from the previous year, based on information in the annual report of the sprawling ports-to-telecoms conglomerate. Hutchison chairman Mr Li, Asia's wealthiest businessman, was paid a mere HK$50,000 director's fee, which he turned over to sister firm Cheung Kong (Holdings), the report said.

The report did not identify Mr Fok by name as the highest-paid director, but he is widely believed to be the recipient of the fattest pay packet at the company, whose shares had slid 38 per cent in the 52 weeks through Monday.

Forbes magazine last year identified him as the highest-paid executive in 2001 among the world's 50 largest firms outside of the United States by market capitalisation, earning an estimated US$13 million that year.

In 1999 a Hutchison director - widely believed to be Mr Fok - took home a US$26.4 million bonus after Hutchison scored a hefty US$15.12 billion profit on the sale of its Orange mobile phone business to Germany's Mannesmann. - Reuters   Business Times 02 Apr 2003

Hutchison Whampoa group managing director Canning Fok is being touted as the top earner in Hong Kong last year after raking in $105 million, according to the company's annual report released last night.

Hutchison reported a 60 per cent fall in net profit for last year, at $12 billion. The company's highest-paid executives suffered a 12 per cent fall in salaries, according to the report, with only Fok earning $105 million.   - 2002

   >> Frank Sixt featured on cover of CFO Asia

Executive directors Susan Chow and Frank Sixt were likely to be the second and third highest earners in the company, with respective salaries of $28 million and $27 million last year.

Fok joined Hutchison in 1984. Fok went to Britain to restructure the company's then Orange mobile phone business. He with Frank Sixt finally got Orange in the black before listing the company. His efforts in helping Germany-based Mannesmann buy Orange in 1999 made a profit of $118 billion. Following a bonus of $180 million, Fok's income that year was $200 million.

The information technology bubble in 2000 boosted salaries of people such as Pacific Century CyberWorks (PCCW) deputy chairman Francis Yuen, who earned more than $280 million. While Fok earned only $120 million that year, Yuen took away the best annual wage.

PCCW's 2001 annual report out this week revealed Yuen's salary had dropped to $26 million.

Despite the economic downturn, the number of staff working for Hutchison increased by 57 per cent to 77,000 worldwide last year. But total salary expenses, excluding directors' remuneration, only increased by 30 per cent to $10 billion.  -  2002 April 13  iMail     

Li's our idol, say bosses

Hong Kong tycoon Li Ka-shing has been voted one of the top 10 world business leaders respected and admired by senior executives on the mainland.

Bill Gates, boss of global software giant Microsoft, heads the ``list of top 10 commercial idols'' published by a Beijing-based business weekly.

Gates impresses Chinese executives as a ``workaholic''. He is the richest man in the United States with a fortune estimated at US$52.8 billion (HK$411.84 billion).

Following Gates is Jack Welch, GE's former chairman and chief executive, who is nicknamed ``Neutron Bomb'' for his lively work style and no-nonsense reform of the company. Welch cut GE's workforce almost by half, from 400,000 to 220,000, in his first 10 years.

Then comes the late Konosuke Matsushita, former chairman of Japan's Matsushita Electric Industries, whose nickname was ``Listener''.

When he died in 1989, Matsushita left an estate of more than US$1.5 billion.

Li, chairman of property developer Cheung Kong (Holdings), ranks at No 4 on the list of business idols.

Li is admired as ``A Man who Can Bear Hardships''.

In July, Li was voted the most impressive Chinese businessman in a poll of 4,236 residents in 10 cities across the mainland, including Beijing, Shanghai and Guangzhou.

The 74-year-old magnate has a fortune estimated by Forbes at US$10 billion.

He is followed by News Corp chairman Rupert Murdoch who is called an ``Adventurer''.

Andy Grove of Intel, nicknamed ``Single-Minded Man'', is in sixth place.

International financier George Soros is seen as a market ``Sniper'', and is admired on the mainland for his suspected involvement in the 1998 attack on Hong Kong's currency led by hedge funds.

At No 8 is Liu Chuanzhi of Hong Kong-listed Legend Group who is dubbed ``Smiling General''.

Designer Coco Chanel is viewed as an ``Elegant Lady'' and ranks at No 9.

Completing the list is Hugh Hefner, founder and editor-in-chief of adult magazine Playboy, who not surprisingly is called ``Playboy''.

The list was produced by Beijing-based Chinese-language weekly Business Watch, which polled about 200 senior business executives in Shanghai, Beijing and Guangzhou.

The executives ran companies with more than 300 workers and their annual salaries were about 400,000 yuan (HK$377,040) each.   - 2002 December 17 Hong Kong Standard      

Sizing Up Sages - Buffet v. Li

How does Li Ka-Shing, the billionaire chairman of Cheung Kong and Hutchison Whampoa, stack up against Warren Buffett? Like the Sage of Omaha, Li has become known for circling distressed companies; recently, that meant Global Crossing. It's a comparison brought up by Richard McConnell -- an investor with a Hong Kong money management company called South Ocean Partners -- in his recent newsletter to his clients.

To start, the obvious points: Buffett, through Berkshire Hathaway, gravitates to established "old economy" companies, observes McConnell. Li, through Cheung Kong, likes real estate and telecom. Both are opposed to balance-sheet debt. Buffett avoids day-to-day management responsibility; Li works closely with managers in day-to-day operations. Buffett rarely shares his investments with partners; Li has numerous partnership holdings and minority interests. And finally, Buffett has never paid a cash dividend. Li has boosted Cheung Kong's dividend every year.

Berkshire Hathaway owns a broad range of companies in varied industries, including Coca-Cola, Gillette, Wells Fargo, General Reinsurance, as well as a candymaker, a boot company and a brick producer.

Meanwhile, Li's portfolio, McConnell reports, is "largely a collection of forward-looking companies," including third-generation mobile operators, container port facilities, logistics services, genomic research outfits, Internet Websites (among other things, he bought control of Priceline), and e-commerce contracts with the Hong Kong municipal government. Li also has varied investments in China. Many of these investments are owned by Cheung Kong's 50%-owned subsidiary, Hutchison Whampoa. Cheung Kong also has Hong Kong's largest real-estate developer and "its strongest balance sheet," says McConnell. Together, Cheung Kong and Hutch account for 15% of the Hang Seng index.

So who's on first? Buffett. Berkshire has grown earnings 19% over the past decade, McConnell says, while Cheung Kong has compounded earnings at 14.3%. Berkshire stock has also returned 24% a year on average over the past decade to a recent $73,300 a share. Hutch has returned 20% a year and traded last week at HK$67; Cheung Kong gained 16% and changed hands at HK$71.

Which investor does McConnell admire more? McConnell maintains that Buffett benefited from "a head start" at the knee of value investor Ben Graham; Li got his chops on the streets of Hong Kong and went on to found the Hong Kong real estate industry. And today, says McConnell, Li "has a portfolio with technology's promise to replace his stalled real-estate holdings. None of his competitors had the foresight to do this." Moreover, he dismisses Buffett's holdings as being "in mundane industries dependent upon superior management of his selection. They are companies without technology's promise that will lose their aging managers and aging chairman soon without plans for replacement."

And although sentiment is lousy for telecom operators, Li's portfolio "will reach the world's consumer market"; Buffett's, he sniffs, is "provincial."

Says McConnell: "The question of who has produced the greatest rewards for their shareholders is a question that today might go to Buffett, but in five years no way! If you plow back your dividend from Cheung Kong into Cheung Kong stock, the race may go to K.S. Li."  -   2002 February 25          by Leslie P. Norton       Barron's          

DEALMAKING

Asia's Superman swoops again
Is  Li Ka-shing really the superhuman investor that Asians think he is?

In all honesty, most of Asia's tycoons, no matter how illustrious they appear at home, are really keepers of glorified mom-and-pop stores. The main exception is Li Ka-shing.  This is not because Mr Li dominates the economy of Hong Kong, where he runs most of the port (the world's biggest), has the monopoly on supplying electricity to the main island, ranks among the territory's top landlords and retailers, and owns the biggest mobile-phone operator. Rather, it is because he, alone in his region, regularly makes his powers felt all over the world, and even influences the future of whole industries.

At the moment, this is most evident in the telecoms industry. On August 9th, one of Mr Li's two main holding companies, Hutchison Whampoa, joined with a Singaporean partner to scoop up 61.5% of Global Crossing, a bankrupt American company with a global network of fibre-optic cables, for $250m. Inevitably, this invited comparisons between Asia's most famous investor and America's,Warren Buffett, who is also bottom-fishing for distressed telecoms assets.

Mr Li will make an even bigger impact this autumn, when Hutchison starts rolling out third-generation (3G) mobile-phone services in Britain, Italy, Sweden, Australia, Hong Kong, Israel and Austria.

Europe's telecoms incumbents may be delaying their 3G launches, and investors may worry that the technology might flop, but Mr Li is undaunted.

This has produced two very different reactions. The markets-ie, mostly non-Asian fund managers-are punishing Mr Li for this gamble, and have marked Hutchison shares down by over half since early 2000. On August 8th, Standard & Poor's, a credit-rating agency, said that it too was pessimistic about the outlook for Hutchison and its sister company, Cheung Kong.

Retail investors and the general population of Hong Kong, however, see it differently. In their minds, there is no question that Mr Li-whom they call Chiu Yan, or Superman-is infallible.

When Mr Li launches a company, with or without a business plan, and lists its shares, they rush to buy-as they last did in July, when the initial public offering of Mr Li's life-sciences start-up was 120 times oversubscribed. If Superman now thinks that 3G is the future, why doubt it?

The people of Hong Kong remain wowed by Mr Li because, to them, he epitomises success, a mystique he is adept at cultivating. Hong Kong is a superstitious place, and it helps that Mr Li was born in 1928, an auspicious dragon year. His key buildings are blessed with excellent feng shui. He sets his watch eight minutes early, because “eight” sounds like “prosperity” in Cantonese. He regales his visitors with stories about his cheap watches to show what a simple, ascetic man he still is. He pouts self-pitifully (“Do you not want me to invest anymore?”) every time anyone dares to suggest that he is growing too powerful-and many do, all the more so now that Mr Li has said he wants a Hong Kong television network in addition to the local radio station he already owns.

Such controversies aside, does Mr Li deserve his reputation? In part, his success can be explained by luck: he has been in the right place at the right time. From the 1980s to 1997, Hong Kong property was a one-way ticket to wealth, since the colonial government had a policy of restricting the supply of new land for building. Mr Li was among several developers who simply rose with land prices. Similarly, once he secured his niche in the containerport, he piggy-backed on Hong Kong's rise as a trading hub. In 1997, when other Asian tycoons stumbled with their currencies, Hong Kong's dollar peg kept him standing.

Luck, however, is only part of it. Alone among Hong Kong's property tycoons, Mr Li knew when to branch out overseas and into new industries. Equally rare, he always found and hired the best professional managers, many of them foreigners. Most importantly, his investment record has, so far, outperformed that of all other Asian tycoons. Everyone who has worked with him raves about his nose for opportunity.

Like Mr Buffett, he appears to look for value, but comparisons with the Sage of Omaha are overdone. Mr Buffett crunches piles of numbers in the search for undervalued companies, then holds their shares indefinitely. Mr Li, by contrast, is, on the face of it, the archetypal Asian asset-trader. He tries to time the market. He is patient but swoops with phenomenal speed when opportunities present themselves. Global Crossing is a case in point.

It has few synergies with Mr Li's other telecoms assets. Mr Li first made an offer in January, then withdrew it, and then came back with a new offer, two-thirds lower.

More than just a trader Yet even the label “asset-trader”, appropriate for most Asian tycoons, appears too small to fit Mr Li. Transactions have made him famous-his biggest coup was the perfectly timed sale in November 1999 of his stake in Orange, a British mobile-phone operator, for a profit of around $15 billion. But he also knows how to build a business. In Orange's case, he had nursed it for years before the sale. That skill, Mr Li's fans reckon, should ensure that he will be able to turn 3G into a winning proposition.

Clearly, Mr Li ought never to be underestimated. On the other hand, his record has blemishes, though few remember them. In the 1980s, he invested in a Canadian oil company that went on to underperform for years. Even in mobile telephony, his first venture in Britain, called Rabbit, flopped. Ultimately, the best way to analyse Mr Li may be to compare him with celebrity fund managers who, for whatever reasons, outperform for some time, then use their fame to play with ever bigger sums and, sooner or later, start underperforming just like everybody else."   - 2002 August 15      The Economist  

Note:  In the end, Singapore Technologies took this deal on its own.

Hutchison may curb its role

Hutchison Whampoa Ltd, as part of a revised bid to win US approval for its purchase of bankrupt Global Crossing Ltd, may agree to limit its role managing the company, people familiar with the matter said.

A US government committee had asked Hutchison, which is controlled by Hong Kong billionaire Li Ka-shing, and its partner, Singapore Technologies Telemedia Pte, for assurances that the acquisition of Global Crossing's fibre-optic network will not compromise national security.

Global Crossing's network transmits communications for US agencies, and the panel had concerns that China might interfere with Hutchison's management.

Under the existing plan, approved by a bankruptcy judge, the companies would have joint say over management. The parties are now discussing a plan in which Hutchison may act as silent partner, making an investment and vesting its management control in another party, people said.

'The government is in the driver's seat and can say, 'We're not going to allow you to take over this company unless you do what we tell you to do',' said Ivan Eland, a senior fellow at the Independent Institute, an Oakland, California-based policy research organisation.

Steve Lipin, a US-based spokesman for Hutchison, said the process 'is highly confidential and therefore we cannot comment. We continue to cooperate with the US government to address any concerns.'

Hutchison and ST Telemedia last year agreed to take a 61.5 per cent stake in Global Crossing after the Hamilton, Bermuda-based company emerges from Chapter 11, expected this year.

The Committee on Foreign Investments in the US, which is chaired by representatives of the US Treasury Department and includes members of the State, Commerce and Justice Departments, made the request for revisions.

The committee told the companies it needed more evidence the 27-nation fibre-optic network would remain secure if the purchase is completed, people familiar with the matter said earlier last week.

Under a change being discussed, Hutchison would cede its four seats on Global Crossing's board to independent directors, a source said. Hutchison has considered several possibilities, including the appointment of prominent US politicians or businessmen to act as its proxies on its behalf on Global Crossing's board, sources said on Friday.

Hutchison is not thought to be considering reducing the stake it would hold in Global Crossing.

'We continue to cooperate with regulatory authorities in completing the approval requirements to consummate the transaction,' Global Crossing spokeswoman Tisha Kresler said in a statement. -  2003 March 3  Bloomberg, NEW YORK TIMES  

Global Crossing and its creditors agreed yesterday to sell control of the company for $250 million to two Asian companies, three months after the creditors rejected a $750 million offer from the same bidders.

After many delays and months of negotiations, Global Crossing, a once-highflying international telecommunications concern, announced a deal with Hutchison Whampoa of Hong Kong and Singapore Technologies Telemedia, a unit of Singapore's state-run phone company.

Soon after Global Crossing filed for bankruptcy protection in the spring, the Hutchison group offered $750 million in cash for about 79 percent of the company, implying an overall value of about $950 million.

Confident that they could get more for control of Global Crossing, which has assets valued at more than $20 billion, the company's creditors rejected that offer.

At least two other groups, one led by Platinum Equity, a private investment firm, and another led by an investment fund backed by Bank One, submitted bids for Global Crossing. But over the summer, as other telecommunications carriers like Qwest and WorldCom imploded amid accounting scandals, the bids for Global Crossing have become smaller and smaller.

Under the terms of the deal, Hutchison and Singapore Technologies will end up with 61.5 percent of Global Crossing after the $250 million investment, implying an equity value of only about $407 million, less than half the value associated with the original bid.

Still, John Legere, Global Crossing's chief executive, declared a victory in yesterday's announcement.

"This is a textbook model for a successful strategic investment," he said in a statement. "Hutchison Telecommunications and Singapore Technologies Telemedia are highly respected telecom companies with assets and skills that complement Global Crossing's unmatched global network. With our turnaround well under way, and the support of strong new strategic partners, Global Crossing is poised to become the global leader providing networking services to enterprises and carrier customers in more than 200 of the world's top cities."

Before that can happen, however, the company must contend with about 60 shareholder lawsuits and investigations of its accounting by the Justice Department, the Securities and Exchange Commission and Congress.

A bankruptcy judge in New York gave the deal his preliminary approval yesterday, and the company and the winning bidders must develop a formal plan by the middle of next month.

During the telecommunications boom of recent years, Global Crossing amassed more than $12 billion in debt and achieved a peak market value of almost $50