Monday

Monday, April 8, 2002
The other Richard Li

LACHLAN COLQUHOUN

Before Australians had heard of Richard Li Tzar-kai, son of Li Ka-shing, they knew about Richard Li, the stockbroker from Melbourne company Sino Securities.

Like the Pacific Century CyberWorks chief, Melbourne's Richard Li was born in Hong Kong, but went to Australia at the age of 19 to study and it has been his home since.

After 30 years in Australia, Mr Li has built up a profile in the business world as an investment banker and venture capitalist through his role as managing director of Sino Securities, one of Australia's first listed investment houses.

Mr Li, 49, jokingly lays claim to the title of the "real" Richard Li.

"I must be the original Richard Li - the other one is just a spring chicken," he said.

The age difference, however, has not stopped the Australian press from frequently confusing the two men, to the extent that photographs have been mixed up erroneously on articles about their various business activities.

"There was a big article in one of the local newspapers about the other Richard Li, with my photograph, saying I had lost a billion dollars," Mr Li said.

"I had some friends who rang me and said I should be suing the paper, but I thought that if I could afford to lose a billion there must be something good about me - it was good press."

While Hong Kong's Richard Li is by far the more celebrated and widely known of the two, Melbourne's has some significant business achievements of his own, even if - a market capitalisation of about A$10 million (HK$41.3 million) - his company is playing in a different league.

Beginning his career as a fund manager for National Mutual, which is now AXA Asia Pacific, Mr Li went to work for Australian investment house Ord Minnett before founding Sino Securities, which listed on the Australian Stock Exchange (ASX) in 1987, six months before the market crash of that year.

In its earliest incarnation, Sino Securities was known as Australia's main "Chinese connection", as Mr Li brought mainland and Hong Kong companies to Australia for listing on the Australian exchange.

These were the days when so-called "China concept" companies were lured to Australia for listing as part of the ASX's plan to spread its sphere of influence into the Asia-Pacific, and as an opportunity for Australian investors to have access to what was then a boom in China stocks.

It even led to the creation of a "China Index" for these companies listed on the ASX, but all that was swept away by the Asian crisis of 1997-98 and the increasing globalisation of share trading across borders.

Sino has been involved with about 10 floats over the years and they have not all been without controversy.

In 1996, Mr Li had his most concentrated burst of publicity when the Australian float of Guangdong Corp, which Sino underwrote, became ensnared in politics in his home state of Victoria.

Felicity Kennett, the wife of then-Victoria premier Jeff Kennett, was allegedly allocated shares in Guangdong after the 1993 float had closed oversubscribed.

Mr Li always steadfastly rejected the claims of political favouritism which sprang from the incident, but for many Australians this unwanted publicity was Mr Li's 15 minutes of fame.

Away from that spotlight, Mr Li concentrated on his business, which at that time was largely based around using his Chinese connections to set up business opportunities linked to his network of investors in Australia.

But after the good years of the early and mid 1990s, the 1997-98 crisis prompted a major change of strategy.

"The Asian crisis hit that market for Chinese companies very hard, so back in 1998 the board of Sino decided we needed to look for opportunities in other industries and apply our investment banking expertise there," Mr Li said.

"Our Chinese connections are still very much there, and China remains one of my passions, but China has a 5,000-year history and I am sure it will survive three or four years without me.

"I used to travel two or three times every year, but nowadays there is so much to do in Melbourne, and the good thing about the Internet is that it actually does away with travel through the efficiency of e-mail."

The Internet, in fact, has taken over from listing Chinese companies as Mr Li's main business focus.

Through another Melbourne-based Chinese-Australian, David Tan, Mr Li became involved in an Internet company called GoConnect, which is listed in Australia and Germany.

Sino Securities holds 65 per cent of GoConnect.

The company's asset is proprietary technology that is able to deliver Internet television through narrow-band connections.

"We call this technology the smartest traffic control system on the Internet, because instead of building bigger roads to solve the traffic jam - which is broadband - why incur several billion dollars in expenses when you can use the existing copper wire and put in traffic control?"

Mr Li describes GoConnect's objective as capturing a share of television advertising revenue, and to that end the company has launched a movie preview channel following agreements with major Hollywood studios, and is branching into extreme sports and share-market advice.

"Anyone in the world can download our software and watch. This is global television," Mr Li said.

"And we think it has potential because there are so many more people using narrow band than currently have broadband, and things are likely to stay that way for a while.

"But I don't think the Internet public is going to sit in front of the screen and watch half an hour of TV, so we are concentrating on short items - things people will want to watch for 30 seconds or so."

The GoConnect venture led to Mr Li's only attempt to contact his namesake at CyberWorks.

"I did send him an e-mail, just out of the blue, introducing the technology, but there are probably many many Richard Li's who send him e-mails so I never got a response," Mr Li said.

"But I did it because he is now in somewhat of the same industry. He is trying to create his own brand of Internet television through broadband and that is where I think he is going to run into problems, because 95 per cent of the world does not have it."

Another of Melbourne's Mr Li's technology ventures is Sino's 20 per cent interest in Multilink, a company with "smart phone" technology that delivers the cheapest call rates to subscribers.

"With deregulation in the telecommunications industry, it is very confusing for consumers who want to find the most competitive rate," Mr Li said.

"Multilink can cut through that and eliminate the confusion by matching the lowest call rate simply through the software in the phone."

Hong Kong-listed e-Kong Group offers a similar service in the SAR.

Mr Li's ambition is to list Multilink, which remains in private hands. Mr Li said he had had inquiries from Asia from contacts wanting to take the technology to the region.

In his most recent venture, however, Mr Li has returned to his earlier China theme with the creation of a company, Pharmasafe, to market a Chinese treatment for hepatitis B developed by Professor Tzi Chiang Lin from RMIT University in Melbourne.

The treatment comes in the form of pills made from traditional Chinese medicines, and is said to cure about 10 per cent of patients and remove symptoms in about 75 per cent.

Professor Lin, who has visiting professorships at universities in Beijing, Weifang and Nanjing, will hold 60 per cent of the company, while Sino will have 40 per cent.

GoConnect will provide the Internet presence for the venture, which is still going through the Australian drug-approval process.

"There are some 400 million people in the world who are chronic hepatitis B sufferers, and the Internet is the best way for them to access a product like this," said Mr Li, who plans to hang on to his seat on the Pharmasafe board and help guide the company.

"That is the way we do things. If we like an idea then we put our brains behind it, raise the seed capital and take it through to listing," he said.

"But now we tend to do more of what I call in-house listing, where we can continue to have a degree of influence on the direction of the company. So our philosophy has changed from when we were simply underwriting floats and now we are actually all in it together with the companies, and I think that is a much better formula for success for us as an investment bank."

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