Chinese media mogul Li Ruigang says Hong Kong should create an open and welcoming regulatory system
Li Ruigang also turns on doubters and says ‘no one thinks I want to turn Hollywood red’
Hong Kong’s regulators should create a more welcoming regulatory system in line with global trends to attract investment, says the founder and chairman of Chinese media mogul CMC Capital, Li Ruigang.
“A good regulatory system and welcoming economic environment are important to Hong Kong’s future, which relies on the vision of the regulators,” Li said yesterday when meeting the media for the first time since CMC’s investment in the city’s dominant free-to-air broadcaster TVB raised concerns last month.
Li, dubbed China’s Rupert Murdoch, was referring to the “dual share” system that is common among US firms, particulary in Hollywood and the Silicon Valley tech hub of California, but banned in Hong Kong.
It allows a minority shareholder – usually the founding shareholder whose stake has been diluted over many rounds of fund-raising – to keep control of key company decisions by having majority voting rights.
Li, who owns a stake in the world’s largest entertainment and sports talent agency, also dismissed those who questioned his background and called him a Chinese communist.
“I sit on the board of Creative Artists Agency – no one suspects that I am going to turn Hollywood red,” he said. “But here in Hong Kong, how come some people labelled me in this way?”
The topic of dual shares generated fresh discussion last month when the city’s stock market regulator, the Securities and Futures Commission, flagged concern at CMC’s influence in TVB, after the broadcaster disclosed such a shareholding structure.
Pressure is growing on regulators to ease the rules on duals class shares to attract internet start-ups and tech companies wanting to raise capital in the city.
CMC is the single largest shareholder in TVB through its investment in Young Lion Holdings, whcih owns a 26 per cent stake.
The SFC raised concern that Li might not have substantial equity interest in CMC and may not be the ultimate controlling shareholder.
Li countered by emphasising that he had “complete control” over CMC, owning 86 per cent of voting rights of CMC, despite owning only 26 per cent of its shares under a dual share structure.
The Communications Authority, the broadcasting regulator, then engaged a queen’s counsel to examine the relevant licence conditions and statutory declarations and deeds of undertaking submitted by TVB and relevant parties.
“People seem to hint that there is an invisible hand behind CMC that seeks to influence TVB and Hong Kong . This is totally not true,” said Li.
CMC has other shareholders such as Tencent and Alibaba. Alibaba owns South China Morning Post.
In response to regulators’ concerns, Li said that the technical shareholder structure of CMC in TVB had already existed before he invested in the broadcaster, saying “it is not his invention.”
He said Hong Kong is an important part of CMC’s plan to go global.
“That is why CMC invested in TVB and is sister company Shaw Bothers,” he said .
He denied rumours that he wanted to sell TVB shares, saying it was a long-term investment.
“I have capital, I have the resources and I have passion in the media and entertainment business. I really want to do something for the entertainment industry in Hong Kong.”
Li said the recent controversy surrounding CMC and its investment in TVB was not necessarily a bad thing.
“It is good to have the discussion among stakeholders and the public, to see what kind of regulations are good for Hong Kong,” said Li, adding that a good regulatory system had made Silicon Valley and Hollywood successful global tech and entertainment hubs.