The Undergraduate
23 March 2001
updated 24-Mar-01
Investors who (despite our warnings) bought stock in Pacific Century Cyberworks Ltd (PCCW) during the heady days of early 2000 must now be wondering just what their Chairman was made of. Many investors, particularly in the US, where the family name is less important, may have drawn confidence from the often-stated "fact" that Richard Li had a degree in computer engineering from Stanford University, the prestigious university around which Silicon Valley grew.
Indeed, public relations material previously distributed by the company and on its web site included a claim that Mr Li:
"graduated from Stanford University with a degree in computer engineering".
Hats off to the International Herald Tribune for checking this out with Stanford insiders and getting the scoop. Journalists have spent years repeating the same falsehood about Mr Li's degree without ever being corrected by the only person sure to know. Since PCCW's general counsel claimed to the IHT that the release of Mr Li's academic record without his consent would be a breach of a US privacy law, by the company's own assertion, journalists had no independent way to verify the claim themselves.
The myth persisted despite the fact that Mr Li's companies have a crack team of public relations staff who monitor and report back on media coverage, and have in the past written to the press to complain about other aspects of coverage. Indeed, when Webb-site.com blew the cover on the investigation by detective agency Kroll of our (and others') negative criticism of the group's Cyberport property development in 1999, the spotlight immediately fell on the group, which denied having "assigned anyone to investigate the Cyberport or criticism of it".
As a result of the IHT article, PCCW yesterday issued a statement, which said in part:
"The Company emphasizes that this inaccuracy did not appear in public disclosures filed by the Company in accordance with applicable legal requirements."
What on earth has that got to do with it? Webb-site.com believes that any statements made by a company, whether or not they are filed with regulators, should be made to the same standard of care, accuracy and truthfulness. To place this "emphasis" on legal filings as opposed to other statements brings into question the importance the group attaches to its other public statements.
Legally filed Documents
The claim regarding legal filings is true as far as it goes. However, Webb-site.com can exclusively reveal that the degree claim has been made in legally filed documents for which Richard Li, as a director of the companies concerned, was legally responsible.
Mr Li has been a director of Nasdaq-listed Indian portal Rediff.com Ltd since Apr-00, and in the prospectus dated 13-Jun-00, his biography reads in part:
"Mr Li holds a B.S. degree in Computer Engineering from Stanford University."
That document was filed with the US Securities and Exchange Commission in accordance with applicable legal requirements. In another case, Mr Li was a director of Singapore-listed Mediaring.com Ltd when it published an IPO prospectus on 11-Nov-99, which stated:
"Mr Li graduated with a Bachelor of Science degree in Electrical Engineering from Stanford University."
Electrical engineering? Now we can't even seem to pin down the subject. The degree claim was repeated in Mediaring's 1999 annual report which is dated 24-Mar-00. Both documents were filed with the authorities in Singapore as legally required. Indeed, the prospectus contains an explicit responsibility statement which says:
"This Prospectus has been seen and approved by the Directors and they individually and collectively accept full responsibility for the accuracy of the information given in this Prospectus and confirm, having made all reasonable enquiries, that, to the best of their knowledge and belief, there are no other material facts the omission of which would make any statement in this Prospectus misleading and that this Prospectus constitutes full and true disclosure of all material facts about the Invitation, the Company, the Group, the issued Shares and the Invitation Shares." (our highlighting).
Now we know how long these documents can be, but surely the one of the first things that most non-executive directors would do, when presented with a draft of the document, would be to look at their own biography and confirm it? We are not dealing with a novice director here - Mr Li lists dozens of directorships in the Mediaring prospectus, and he must know what his duties are.
The prospectus clearly states that Mr Li (as a director) saw the prospectus and approved it. We can only hope that he gives greater attention to documents for which he is responsible in the future.
Stop press
PCCW has put out a statement regarding the filings (not one which would be legally required to be filed) which tangentially refers to the two listings without naming them, and states:
"It appears that this situation arose principally because... information for the filings was not processed by the relevant department within PCCW in accordance with the same procedures established for the dissemination of information by PCCW group companies."
This does nothing to address whether Mr Li saw and approved the Mediaring prospectus as the document claims in the responsibility statement highlighted above. Either he did see it and approve it, or he didn't, in which case the statement is false but he would still have been legally responsible.
Indeed, section 50 of the Singapore Companies Act requires a copy of every prospectus to be signed by every director or by his agent authorised in writing, which amounts to the same thing in law. That copy is then filed with the Registrar of Companies where anyone can inspect it.
© Webb-site.com, 2001
Organisations in this story
People in this story
Topics in this story
Sign up for our free newsletter
Recommend Webb-site to a friend
Copyright & disclaimer, Privacy policy