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High roller from HK puts US$17 billion on telecoms

Li Ka-shing's moves * The Chinese entrepreneur heads a US$60 billion global business empire. * Li owns the world's largest network of container ports. * He's now betting US$16.7 billion on third-generation mobile phone technology.

In his 70th-floor penthouse office looking north over Hong Kong harbor toward the Chinese mainland where he was born, Li Ka-shing talks about his rise from penniless refugee to head of a US$60 billion global business empire.

"I am never satisfied -- like in the Olympics," says Li, whose deal-making exploits have earned him the nickname of Choa Ren, or Superman.

As a 12-year-old boy alone with a father dying of tuberculosis, Li swept factory floors to earn money during Japan's wartime occupation of Hong Kong. As a young man in the 1950s, he manufactured and sold plastic flowers.

Today, Li owns the world's largest network of container ports, including Rotterdam's Europe Container Terminals and Hong Kong International Terminals and is acquiring, at about 2 percent of book value, bankrupt US fiber-optic network operator Global Crossing Ltd.

He also has a Canadian oil company, Husky Energy Inc; 3,000-store retail chains in Europe and Asia; and real-estate holdings that include Oriental Plaza, the biggest development in Beijing since the Ming emperors built the Forbidden City 600 years ago.

He's also betting US$16.7 billion on third-generation phone technology -- in Britain and Italy and then in Australia, Austria, Denmark, Hong Kong, Ireland, Israel and Sweden.

That makes some investors question whether Superman, at 74 and with a personal fortune of at least US$6 billion based on the value of his seven publicly traded companies, is still invincible.

"There's a tremendous amount of skepticism among investors, even toward a man with a track record like Mr. Li," says Fred Hu, a Hong Kong-based managing director at Goldman Sachs Group Inc.

Shares in Hutchison Whampoa Ltd, the conglomerate that owns Li's telecom interests as well as his ports and retail stores, have fallen more than 60 percent to HK$50.75 today from HK$136 on March 28, 2000, compared with a 48 percent decline in the benchmark Hang Seng Index.

Li's 36.9 percent-owned Cheung Kong (Holdings) Ltd, which owns 49.9 percent of Hutchison plus much of Li's real estate investments, was down more than 55 percent in the same period to HK$52.25 as of 12:30pm in Hong Kong, from HK$119.

Cheung Kong was the third-worst-performing stock in the 33-member Hang Seng Index in the year through today; Hutchison was fifth worst.

Li, who responded to questions from Bloomberg News in writing and in an interview, says investors are wrong to doubt his strategy. "3G is not a gamble," he says. "People are quite wrong about that."

Li says 3G's selling point is that it combines the convenience of mobile phones with the best of the Internet. "You have two of the most successful consumer technology revolutions in the history of mankind, brought together in one device," he says.

The 3G phone network, for which Hutchison is building a series of base stations and routers, will make possible transmission speeds as much as 15 times faster than existing cellphones. That will enable users to perform functions not currently available, such as videoconferencing and watching live sports events.

Li says the European phone business can break even by 2005.

"We have done the math, and we do not think it possible," says Michelle de Lussanet, senior analyst at Forrester Research Inc in Amsterdam.
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