Tension in Hong Kong’s wealthiest family burst into the open on Wednesday when Richard Li said publicly that he was “dissatisfied” with the sale of his PCCW telecoms company to a consortium backed by his father, tycoon Li Ka-shing.
Richard Li also said he would be “very happy” if the contentious deal to sell PCCW fell apart.
His comments, in an interview with a Hong Kong newspaper, and which spokesmen declined to deny, came as minority shareholders prepare to vote on the deal next week.
Mr Li’s independence and tension with his father are among Hong Kong’s worst-kept secrets but public displays of the family drama are unprecedented.
Richard Li’s comments add a twist to what has emerged as Hong Kong’s business story of the year.
On Tuesday, Francis Leung, an investment banker and confidant of Li Ka-shing, issued a statement clarifying aspects of his purchase of Richard Li’s controlling 23 per cent stake in PCCW, which runs Hong Kong’s core telecoms network. Mr Leung first agreed to pay $1.2bn for Mr Li’s PCCW shares in June after talks to sell its assets to rival bidders Macquarie and TPG-Newbridge were vetoed by China Netcom, the Beijing-controlled telecoms group and PCCW’s second-largest shareholder. Its objection to the transaction was political rather than commercial: PCCW, it said, should be “owned and managed by Hong Kong people”.
When Mr Leung had trouble raising the money he turned to Li Ka-shing for a $64m loan to fund a downpayment. This month he disclosed that two of Li Ka-shing’s charitable foundations would also join his consortium, paying $622m for a 12 per cent stake in PCCW.
In his statement on Tuesday, Mr Leung offered to cancel the PCCW transaction “provided that [Richard Li] reimburse the costs and expenses incurred by [me] in connection with the transaction”.
Mr Li hit back in his comments to Ming Pao, one of Hong Kong’s top papers: “I am very unsatisfied with the results,” he was quoted as saying. “I will be very happy if minority shareholders vote down [the deal] . . . [I] will continue to develop and lead PCCW.”
Last week independent financial advisers appointed by Richard Li’s Singapore holding company, Pacific Century Regional Developments, recommended the deal to shareholders. Richard Li has been barred by the Singapore Stock Exchange from voting his 75 per cent interest in PCRD. Both Mr Li and his father declined to comment on Wednesday.