The people's champion
After derailing PCCW's privatisation bid, David Webb intends to keep fighting on behalf of Hong Kong's minority shareholders
Webb points out that he has rigorously campaigned for Hong Kong-listed companies to announce their financial results on a quarterly basis.
He argues that Hong Kong may be a fast-paced financial capital of the region, but when it comes to listed companies reporting their quarterly performance, the city still lags behind the mainland and Singapore in terms of regulation. It is common for retail and institutional investors to wait until the end of April to find out what happened in the year ending the previous December - a long time, especially if one is an institutional investor seeking to gauge and understand the performance of the company in the coming year. "What we need is clear-cut reporting from the listed companies, including numbers we can trust," Webb says.
Perhaps it is unfortunate timing for Hong Kong, but Webb says that sympathy for companies will be in short supply because political pressure had blocked earlier efforts to upgrade reporting practices and listing standards in 2002. He took up the cudgels again last year, but the issue was mired in a bureaucratic muddle and has now been relegated to a long-term-goal category.
One explanation for the delayed response by the government to the proposed changes could be to protect wealth at a time when many companies face a troubled future because of the global economic crisis.
The activist warns that Hong Kong is in real danger of being sidelined as just another "mainland commercial city", especially since the central government has made it clear that it will develop Shanghai to become its international finance capital in the next 10 years.
"If we don't raise our competitive standard and establish these rules, then there is no way for a foreign multinational to choose Hong Kong. The SAR would lose it pre-eminent position as the gateway to China," he warns.
All Hong Kong will be left with in terms of financial services, he argues, will be asset management and private banking - two areas where Singapore is already chipping away at Hong Kong's market lead.
The discussion returns to minority shareholders' rights and the stunning verdict of the Court of Appeal that forced Richard Li and China Unicom (SEHK: 0762, announcements, news) to abandon the PCCW privatisation bid. Though Webb is modest about the whole case, it was the anonymous tip he received that helped the Securities and Futures Commission (SFC) to launch an investigation into PCCW's privatisation move.
Webb is reluctant to talk about the source of the tip, beyond saying that he would like to keep his sources secret, like any self-respecting journalist.
He immediately alerted the SFC and the Independent Commission Against Corruption about the abnormal share transfers after the offer was made public earlier in the year. He asked the regulator to look at the company's record to check on shareholders, as he himself did before giving his findings to the SFC.
The SFC took the baton from there and its legal team worked overtime to argue the case that derailed the telecom giant's bid.
The judgment of Justice Anthony Rogers was a victory for minority shareholder activism in the city and the local media termed it the battle of David versus Goliath.
Last month, the Court of Appeal denied applications from PCCW and its parent company to make a final appeal against the court ruling that rejected the buyout plan of PCCW's shareholders.
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Webb says he has never felt threatened as a result of his exposes about companies and feels safe in Hong Kong. "If I was in Jakarta or Manila, I would have felt threatened. But here I have never been threatened or received a threatening call. If I did, I would call the police," he says matter of factly. As a rule, Webb also never comments on companies with questionable shareholdings that may be connected to bad elements. "I would not want to name them, but you can look at the reprimands from the SFC to know these companies."
He is a member of high-IQ society Mensa but says that his busy schedule keeps him away from attending its gatherings regularly. Webb divides his day equally between his shareholder activism and his investment holdings.
He owns shares in all the companies that constitute the Hang Seng Index and uses his shareholdings to raise concerns about any wrongdoing or issue that would hurt minority shareholders' rights.
Webb launched his own website, Webb-site.com, so that he could publicise his views and write on issues that affect shareholders.
"I sort of started blogging long before it became popular. The main purpose of launching my own site was to highlight the issues and get them done."
One of his first causes celebres was to write about the pros and cons of the Hong Kong dollar's peg to the United States dollar.
The peg came under tremendous pressure from currency speculators in 1998 at the peak of the Asian financial crisis, forcing the Hong Kong Monetary Authority to intervene several times in the currency market to shore up the peg.
At the same time, speculators shorted some Hong Kong stocks, spreading panic among retail investors. This forced the government to intervene in the market and buy shares in some blue-chip companies. Webb says the unprecedented government action set a dangerous precedent of intervention in the free-wheeling Hong Kong market