David Michael Webb
Encyclopedia
David Michael Webb usually known as David Webb, is a well-known activist and share market analyst in Hong Kong. He is a retired Investment Banker, and now devotes much of his time to advocating solutions for better corporate and economic governance in Hong Kong. He is also a significant investor in smaller companies listed on the Hong Kong Stock Exchange
, and is frequently called upon by the media to comment on all matters relating to corporate and economic governance.
in 1986. From 1981 to 1986 he was also an author of books and games for early home computers. After graduation he became an investment banker in London. He moved to Hong Kong in 1991. He retired from Investment Banking in 1998, and now lobbies extensively for increased transparency and public accountability of directors of public companies as well as for the Government of Hong Kong
.
Webb is currently a member of the Hong Kong Securities and Futures Commission's Takeover and Mergers Panel.
He has purchased shares in all the companies which form the Hang Seng Index
, and demands formal votes to resolutions which he judges detrimental to the interests of minority shareholders during the annual general meeting
of public listed companies. To force real votes, Webb launched "Project Poll" to push for formal votes on all proposals at annual meetings of Hang Seng index constituent companies; he initiated Project Vampire, to block resolutions that allow for bypassing of pre-emption of rights issue
s and massive share dilutions
.
Webb is also seen as a bit of a political activist: in December 2005, he advocated dramatic widening the electorate of the functional constituencies, arguing that professionals in fields such as bankers and stockbrokers should get to elect their own representatives. At present, only accountants, lawyers, doctors and teachers are able to exercise that right; stockbrokers are represented by a convicted fraudster, whilst the banking seat has only been contested once in 20 years.
, and has been arguing for a super regulatory authority to assume that role. In the meantime, he argues for improved investor representation on the Hong Kong Stock Exchange
. He was elected an independent non-executive director
of Hong Kong Exchanges and Clearing Ltd.
in 2003, and was re-elected by a landslide in April 2006.
In early 2007, Webb spoke up against the vested interests of smaller local stockbrokers acting against investors' interests, and was the only member to vote against reversing the decision by the former board of directors to cut minimum trading spreads
for equities and warrants
trading at between 25 HK cents and HK$2. The reforms were to be implemented in the first quarter, but was put back on the table following protests by brokers.
In September 2007, the government increased its stake in the Exchange from 4.41% to 5.88%. The Government declared the stake would be held by the Exchange Fund as a "strategic asset".
Webb remarked that the government was the second-largest single investor in the Hong Kong market after Beijing, with a portfolio of local equities estimated to be worth about HK$150 billion. He said the purchase violated the government's stated principle of "big market, small government". On top of already having its own appointed directors, the Government exercised its 63 million share-votes on directors' appointments as a shareholder at General Meeting in April 2008. Webb suggested that "As a 'strategic' investor, the government shouldn't have voted".
In May 2008, Webb resigned one year prior to the expiry of his term as an independent non-executive director, citing back door politics by the Government to install a professional board that would exclude retail investors and adopt more flexible standards for new listings; he also slammed the management for withholding information, which the management denies.
" was controversially granted to PCCW
, controlled by Richard Li
, son of Hong Kong's wealthiest man Li Ka-Shing, without the benefit of a formal tender.
In October 2004, Webb cited lack of transparency in the government's business dealings and demanded audited financial accounts and directors' reports for three companies related to the project, namely Hong Kong Cyberport Development Holdings Ltd., Hong Kong Cyberport Management Ltd. and Hong Kong Cyberport (Ancillary Development) Ltd., to be released under the non-statutory Code on Access to Information.
. The Hong Kong Government was heavily involved in the project, and is the company's 57% shareholder.
Webb was named in CFO Magazine Global 100, as a "Gadfly
" in 2002.
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
, and is frequently called upon by the media to comment on all matters relating to corporate and economic governance.
Biography
Webb graduated in Mathematics from Exeter College, OxfordExeter College, Oxford
Exeter College is one of the constituent colleges of the University of Oxford in England and the fourth oldest college of the University. The main entrance is on the east side of Turl Street...
in 1986. From 1981 to 1986 he was also an author of books and games for early home computers. After graduation he became an investment banker in London. He moved to Hong Kong in 1991. He retired from Investment Banking in 1998, and now lobbies extensively for increased transparency and public accountability of directors of public companies as well as for the Government of Hong Kong
Government of Hong Kong
The Government of the Hong Kong Special Administrative Region of the People's Republic of China, commonly the Hong Kong Government, is led by the Chief Executive as Head of the Government, who is also the head of the Hong Kong SAR...
.
Webb is currently a member of the Hong Kong Securities and Futures Commission's Takeover and Mergers Panel.
Activism
He uses his eponymous webb-site.com as his official mouthpiece on all matters commercial and political.He has purchased shares in all the companies which form the Hang Seng Index
Hang Seng Index
The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong...
, and demands formal votes to resolutions which he judges detrimental to the interests of minority shareholders during the annual general meeting
Annual general meeting
An annual general meeting is a meeting that official bodies, and associations involving the public , are often required by law to hold...
of public listed companies. To force real votes, Webb launched "Project Poll" to push for formal votes on all proposals at annual meetings of Hang Seng index constituent companies; he initiated Project Vampire, to block resolutions that allow for bypassing of pre-emption of rights issue
Rights issue
A rights issue is an issue of additional shares by a company to raise capital under a seasoned equity offering. The rights issue is a special form of shelf offering or shelf registration. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from...
s and massive share dilutions
Stock dilution
Stock dilution is a general term that results from the issue of additional common shares by a company. This increase in common shares of a stock can result from a secondary market offering, employees exercising stock options, or by conversion of convertible bonds, preferred shares or warrants into...
.
Webb is also seen as a bit of a political activist: in December 2005, he advocated dramatic widening the electorate of the functional constituencies, arguing that professionals in fields such as bankers and stockbrokers should get to elect their own representatives. At present, only accountants, lawyers, doctors and teachers are able to exercise that right; stockbrokers are represented by a convicted fraudster, whilst the banking seat has only been contested once in 20 years.
Hong Kong Stock Exchange
Webb argues that there is inherently conflict between the commercial and regulatory roles of the Hong Kong Stock ExchangeHong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
, and has been arguing for a super regulatory authority to assume that role. In the meantime, he argues for improved investor representation on the Hong Kong Stock Exchange
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
. He was elected an independent non-executive director
Non-executive director
A non-executive director or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way...
of Hong Kong Exchanges and Clearing Ltd.
Hong Kong Exchanges and Clearing
Hong Kong Exchanges and Clearing Limited , also 香港交易所 or 港交所; abbreviated as HKEx; ) is the holding company for The Stock Exchange of Hong Kong Limited , Hong Kong Futures Exchange Limited and Hong Kong Securities Clearing Company Limited...
in 2003, and was re-elected by a landslide in April 2006.
In early 2007, Webb spoke up against the vested interests of smaller local stockbrokers acting against investors' interests, and was the only member to vote against reversing the decision by the former board of directors to cut minimum trading spreads
Bid-offer spread
The bid–offer spread for securities is the difference between the prices quoted for an immediate sale and an immediate purchase...
for equities and warrants
Warrant (finance)
In finance, a warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed exercise price until the expiry date....
trading at between 25 HK cents and HK$2. The reforms were to be implemented in the first quarter, but was put back on the table following protests by brokers.
In September 2007, the government increased its stake in the Exchange from 4.41% to 5.88%. The Government declared the stake would be held by the Exchange Fund as a "strategic asset".
Webb remarked that the government was the second-largest single investor in the Hong Kong market after Beijing, with a portfolio of local equities estimated to be worth about HK$150 billion. He said the purchase violated the government's stated principle of "big market, small government". On top of already having its own appointed directors, the Government exercised its 63 million share-votes on directors' appointments as a shareholder at General Meeting in April 2008. Webb suggested that "As a 'strategic' investor, the government shouldn't have voted".
In May 2008, Webb resigned one year prior to the expiry of his term as an independent non-executive director, citing back door politics by the Government to install a professional board that would exclude retail investors and adopt more flexible standards for new listings; he also slammed the management for withholding information, which the management denies.
Cyberport
The project to develop a "CyberportCyberport
Cyberport is a creative digital community with a cluster of technology and digital content tenants. It is owned and managed by Hong Kong Cyberport Management Company Limited which is wholly owned by the Hong Kong SAR Government...
" was controversially granted to PCCW
PCCW
PCCW Limited is the holding company of HKT Group Holdings Limited, Hong Kong's premier telecommunications provider in the Information and Communications Technologies industry. PCCW also holds a majority interest in Pacific Century Premium Developments Limited...
, controlled by Richard Li
Richard Li
Richard Li Tzar Kai is the younger son of successful entrepreneur Li Ka-Shing and brother of Victor Li.Li was 26th in the Forbes List of Hong Kong’s 40 Richest people for 2010...
, son of Hong Kong's wealthiest man Li Ka-Shing, without the benefit of a formal tender.
In October 2004, Webb cited lack of transparency in the government's business dealings and demanded audited financial accounts and directors' reports for three companies related to the project, namely Hong Kong Cyberport Development Holdings Ltd., Hong Kong Cyberport Management Ltd. and Hong Kong Cyberport (Ancillary Development) Ltd., to be released under the non-statutory Code on Access to Information.
Disneyland
In 2005, Webb criticised the government for its lack of accountability, through its refusal to uphold a promise of independent directors on the board of Hong Kong DisneylandHong Kong Disneyland
Hong Kong Disneyland is located on reclaimed land in Penny's Bay, Lantau Island. It is the first theme park located inside the Hong Kong Disneyland Resort and is owned and managed by the Hong Kong International Theme Parks. The park opened to visitors on 12 September 2005...
. The Hong Kong Government was heavily involved in the project, and is the company's 57% shareholder.
Other
From 1999 to 2008, Webb made an annual Christmas share tip where he recommends a single undervalued but well-run company. His picks are believed to have strongly influenced the price of selected stocks. However, The Standard criticised Webb after reporting that he himself owned holdings in his own Christmas share tip (which he has always disclosed), in one case giving himself almost a 40% unrealised profit on his holdings the following day after the tip was published. In December 2009, he announced an end to the "Christmas Pick" after a 10-year run in which they returned a cumulative 1118%, compared with an 87% return in the Hang Seng Index over that period., saying that the success of the picks "has become something of a distraction" to the main goal of raising the standards of Hong Kong's corporate and economic governance.Webb was named in CFO Magazine Global 100, as a "Gadfly
Gadfly (social)
A gadfly is a person who upsets the status quo by posing upsetting or novel questions, or just being an irritant. The term has been used to describe many politicians and social commentators....
" in 2002.