Hong Kong’s Most Vocal Activist Investor Says He Has Cancer

(Bloomberg) -- David Webb, Hong Kong’s most vocal activist investor whose investigations into corporate malfeasance triggered regulatory probes and made him a minor celebrity in the city, announced he has prostate cancer.

Scans revealed tumors along the length of his spine after he saw a doctor about pains in his arm, Webb wrote in a blog post on webb-site.com, his eponymous website where he has blasted stock exchange and regulatory officials over the years on various market failings.

“Like every battle I’ve fought for corporate and economic governance in HK, I will fight this will full vigour, and hope to beat it for several years as new treatments emerge, staying at least one step ahead,” he wrote on the blog. “I still have a lot to live for, including a beloved, supportive wife and our two wonderful children whom I hope to see graduate and start their adult lives.”

When reached by phone, Webb confirmed the content of the post and didn’t want to comment further.

Arriving in Hong Kong in 1991 with Barclays Plc, Webb began to trade his own money, and later morphed into a full time investor. He focused on the city’s small- and mid-sized companies where there was little analyst coverage. A Bloomberg News profile in January 2019 calculated he had amassed a fortune of at least $170 million.

“Think of me as an expert mechanic, walking around a second-hand car lot in which there are no warranties, and all of them are discounted for the risk of being lemons,” Webb explained in a 2018 speech at The University of Hong Kong. By avoiding most of the lemons most of the time “and getting a substantial discount on good companies, I have been able to outperform.”

His attempts to clean up Hong Kong’s stock market trace back to 1998, when he decided to quit working life at age 33 to manage his own money. Most of his reform efforts since then have revolved around Webb-site.com, a forum for his views on regulation, corporate developments, and other market news.

Enigma Network

Among his posts were regular stocks-to-avoid warnings that often triggered sharp falls in share prices as the market digested his analysis.

“I am looking for good companies, but when you do that, you find an awful lot of rubbish,” he said. “Things like the Enigma Network pop out.”

That’s the name Webb coined for the group of 50 Hong Kong companies he told investors “not to own” in May 2017. Six weeks after he alleged that the stocks were entwined in a complex web of cross-shareholdings that had pushed their valuations to unsustainable levels, 38 of them plunged suddenly, some by more than 90 percent.

By his own tally, he has sent more than 1,000 letters to Hong Kong Exchanges & Clearing Ltd. and the Securities and Futures Commission on topics ranging from company disclosure lapses to trading rules.

One of his erstwhile targets, Checkley Sin Kwok-lam, the former chairman of First Credit Finance Group Ltd., one of company’s Webb placed in the Enigma Network, said he wishes him a “speedy recovery.”

“I respect Webb’s research work a lot,” he said. “Even for what he wrote about my company to be non-investable, I don’t blame him nor get angry,” Sin said. “It was because he didn’t understand my company enough. But that was in the past.”

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