Cheung Kong denies land shortage
Cheung Kong (Holdings) chairman Li Ka-shing has defended his call for more land supply, saying the developer already has a large land bank.
'Some people thought the reason that I called for land supply was due to a shortage of land bank in Cheung Kong. That's absolutely wrong,' Mr Li said yesterday.
'We have sufficient land bank . . . many agricultural land sites are ready for [converting into] residential redevelopments.' Last week, Mr Li said an increase in land supply would prevent a sudden rise in home prices and help boost competitiveness.
His comment prompted speculation among analysts that a limited Cheung Kong land bank might have been the reason behind Mr Li's call.
They predicted Cheung Kong's land bank would be used up by 2002 or 2003, which was a relatively short time compared with other leading developers.
Speaking after the company's annual meeting, Mr Li yesterday said the company had bought enough land for future development.
Apart from property investment, Mr Li said his group might also invest in the Chinese medicine industry.
'It is possible because we have started medicine research in China,' he said.
The Government is trying to develop Hong Kong into an international centre for research, manufacturing and trading of Chinese medicine.
Meanwhile, Mr Li yesterday avoided questions about whether his group would spin off its mainland property unit after its convertible notes expired in August.
The notes were issued by Cheung Kong in 1994 with the potential to be exchanged into shares of the mainland subsidiary if it was spun off.
Mr Li said generally speaking, he would not hive off business units if he thought the shares might fall after listing.
Analysts said Cheung Kong was unlikely to spin off its mainland unit as earnings from the division were minimal.
Yesterday, Cheung Kong secured shareholder approval for a general mandate to issue new shares not exceeding 20 per cent of capital, despite opposition from minority shareholder Templeton Investment Management.
Mr Li said there was only one objection and added that the mandate was in line with listing rules.
He said the company had only issued new shares once in the past 10 years, indicating the mandate did not point to a likely share placement.
Templeton managing director Mark Mobius has launched a crusade against companies making placements without also offering them to all shareholders.
