"What we now have are elements of favoritism gradually creeping into politics," says Ken Davies, chief economist for EIU Asia in Hong Kong.
In 1998, to help kick-start its recession-battered economy, Hong Kong awarded Richard Li's newly formed PCCW a contract to develop a cyber-port business park on government-owned land. There was no competitive bidding, and other developers were angry.
Eva Cheng, Hong Kong's deputy secretary for information technology and broadcasting, insists that PCCW did not get a "sweetheart deal." She says Li was the only developer who expressed a willingness to tackle such a risky project. He agreed to shoulder the $1.8 billion in development costs and turn the completed project over to the government.
But accusations of favoritism surfaced again when Hong Kong stock market officials waived the listing rules for several newly formed companies, including Li Ka-shing's Internet portal Tom.com. Barely more than a name and a concept, Tom.com reached a market value of $2.8 billion on the day its stock debuted this year.
The younger Li raised eyebrows again this year when he stepped in at the last minute to wrest Hong Kong Telecom away from would-be buyer Singapore Telecommunications Ltd., a state-linked firm, and Murdoch's News Corp.
Li and his lieutenants sealed the cash-stock deal by wiring a $13-billion loan in less than 48 hours.
Few believe that Li could have raised that money so quickly without the backing of his powerful father and the government of China, which reportedly did not want HK Telecom to fall into foreign hands.
PCCW and Hong Kong officials adamantly deny that governments in Hong Kong or Beijing have interfered on PCCW's behalf in any deal, including the telecom transaction. That deal is awaiting court approval, having been backed overwhelmingly by shareholders in recent weeks.
Richard Li's defenders argue that the allegations of special treatment or family collusion are unfair, given his efforts to forge his own path. Li declined to be interviewed for this article, citing restrictions imposed by market regulators while the telecom deal is pending.
"Richard is his own man and does business his own way," says Kin Yu, a former Hong Kong Telecom executive who works for PCCW. "He will fight tooth and nail, even his father."
But others point out that the Li family enterprises are linked through an elaborate network of shared business relationships. They note that in the mid-1990s, the elder Li bailed his youngest son out of a costly real estate deal in Japan.
The Li family firms "are unlikely to really compete with each other," says David Webb, whose online financial report, the Webb Report, is one of the few places offering detailed criticism of the Li family's operations. "You have a real danger here of an anti-competitive situation."
Amid the brickbats--and despite a steep plunge in the market value of PCCW's major technology holdings due to the global retreat in tech stocks--the younger Li is forging ahead. Even after taking a substantial hit, PCCW is still valued at $20 billion.
Like his father, he is a matchmaker extraordinaire, forming alliances with some of the tech world's biggest names. They include Intel; CMGI, the U.S. Internet giant; Japan's Softbank; and Telstra, Australia's leading telecommunications firm.
PCCW also partners with Germany's DaimlerChrysler Aerospace AG in a $1.5-billion project to build the satellite and ground transmission network that will provide the backbone for Li's broadband Internet venture.
And in just the last few months, Li has signed deals with Taiwan's GigaMedia and China's leading computer firm, Legend Computers.
Factoring In the 'Li Quotient'
In partnership with these powerful allies, PCCW's venture capital arm has invested $750 million in more than 50 companies, following the well-publicized path worn by Japan's Softbank.
The breadth of these investments and the depth of the Li family pockets have forced others to factor the "Li quotient" into their business plans.
"Even if the Li family does not get actively involved in any kind of deal, you either have to make sure the Li family is not going to get into that area or you'd better cut them in for a piece," says Michael DeGolyer, a professor at Hong Kong Baptist University.
Li's newest and grandest bet--worth $1.5 billion over the next five years--is his Network of the World, which is being rolled out across Asia over the next 18 months via NOW.com and cable and satellite television.
Li is gambling that Asia's youth will flock to an interactive broadband network that will eventually allow the audience to access television shows and surf the Web simultaneously, creating a multimedia viewing experience.
It promises a futuristic twist on fashion, entertainment and sports. Are you a fan of tennis star Michael Chang? Tune into the sports program that provides archival footage of Chang's best matches, then click on a keypad and get his stats and order his best-loved videos or favorite food.