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18 September 2002
News Stories:August Headlines

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1. Set up company for bridge: Wu

2. Sir Gordon keen to build bridges with adversary

3. Deadly worm lurks a year on

4. Cheating at golf a lot more fun with GPS

5. Bond issue may cost Hutchison dearly amid worries over 3G

6. Window XP

7. Not-so-retiring Anson keeps SAR guessing

8. Alarm grows at record smog level

9. It was all a matter of timing for chainsaw A1

10. S*A*R [Sorry About Reality] with Tom Hilditch and Shirley Lau

11. S*A*R with tom Hilditch and Shirley Lau

1. Set up company for bridge: Wu
The Standard, 18 September 2002

Tycoon Gordon Wu suggested yesterday that a public company be set up to help fund the proposed Hong Kong-Macau-Zhuhai bridge. Wu also revealed that he and several members of the Chinese People's Political Consultative Conference had written to the Central Government to seek support for the construction of the bridge. Wu's latest moves to garner support for the bridge come amid strong opposition from Hutchison Whampoa managing director Canning Fok, who has objected to any kind of government help for the project. Hopewell Holdings chairman Wu said the project was still awaiting the green light from the SAR government. ``First, we need to get the Hong Kong government to say we need the bridge,'' he said, adding that a preliminary proposal had already been submitted to the SAR government. The Environment, Transport and Works Bureau confirmed the proposal was received last year and was still under study. ``An additional boundary crossing on the west side of Hong Kong is one of the projects included in the 2030 Planning Vision and Strategy study,'' a bureau spokeswoman said. ``The Planning Department is conducting a feasibility study on [the bridge]. This will be finished by the end of the year or early next year.'' The next step is a joint feasibility study with officials from Beijing, Zhuhai, Guangdong and Macau. The study would cover key issues such as whether the bridge was needed, where and when it would be built and whether it should be publicly or privately funded, Wu said. ``I've never thought about receiving subsidies from the government,'' he said. ``In fact, money and skills are never problems for us. We have enough backers to put it to work.'' With a proposed toll fee of HK$150 per ticket, Zhuhai and Macau commuters alone could cover the cost of the bridge, he said, adding the bridge was necessary to maintain the competitiveness of Hong Kong and Pearl River Delta. The project has also received support from bankers and Macau casino tycoon Stanley Ho. Suggesting a public company to garner funding for the estimated HK$16 billion project, Wu said it could be run by the private sectors of Hong Kong and Macau. He said he would also welcome participation by the Hong Kong government. Hopewell could provide capital for the project if the public company were short of funding. Trading, tourism, logistics and financial services were now the four major pillars of the SAR economy, Wu said, adding that other pillars, manufacturing, real estate and high-tech development, no longer existed. The tycoon warned that nothing could help Hong Kong's crippled economy ``unless and until the government gets its budget straight''. ``It's time the government sat down and worked out how to maximise revenue and minimise outgoings,'' he said.

2. Sir Gordon keen to build bridges with adversary
The Standard, 18 September 2002

Calm returned to the fractious Zhuhai-Hong Kong bridge debate yesterday when Port and Maritime Board chairman Gordon Wu Ying-sheung offered the Hutchison camp an olive branch of sorts. Hutchison Whampoa managing director Canning Fok Kin-ning last week cast doubt on whether Sir Gordon's proposed $15 billion, 29km bridge was an attractive investment for the private sector. It was the latest in a long, often acrimonious, public spat between Sir Gordon and Hutchison executives. But the Hopewell Holdings chairman would not be drawn yesterday into another war of words. "I don't want to get into any arguments with Canning or anyone else," Sir Gordon told an American Chamber of Commerce luncheon. "If specific individuals are interested in investing in the bridge, fine. If not, that's fine too; there are plenty of takers." For one, Macau's gambling kingpin, Stanley Ho Hung-sun, who last week said he would be interested in funding the project, which would link Zhuhai and Macau to Lantau Island. "The bridge is financeable [sic] and there are enough backers. The toll will be no more than Hong Kong residents presently pay for the hydrofoil, about HK$150," said Sir Gordon. "Economically, don't worry about it. People will be able to afford the toll." He suggested the project's backers would need to answer five questions before the bridge would be built: whether it was needed, where it should be built, when construction should start, whether it should be publicly or privately funded and, finally, who should finance and build it. "It will be built, and sooner rather than later," Sir Gordon said. "Soon Shenzhen will come under pressure from other low-cost manufacturing regions. But those regions are going to have a hard time competing with Shenzhen's educated workforce and the efficiency of its transport links - its ability to get the goods to market. "We can widen our advantage over those other regions by building the bridge across to the western side of the delta," he said.

3. Deadly worm lurks a year on
SCMP, 18 September 2002

Exactly a year after it first attacked computers worldwide, the mass-mailing Nimda worm remains a destructive force among viruses prowling the Internet. Anti-virus software specialists say Nimda and its variants have remained steady fixtures in monthly top-10 lists of viruses. "More than 35,000 Nimda-related attacks still occur every day," Symantec regional manager for Asia-Pacific security response, David Banes, said, noting that one Symantec sensor received 2,741 Nimda attacks a day on average. Nimda struck the morning of September 18 last year, infecting more than 20,000 computers worldwide. The next day, more than 1.2 million attacks occurred. "As the first mass-mailing blended threat, Nimda changed the landscape of Internet security," Mr Banes said. A virus becomes a blended threat when it uses multiple methods and techniques to infect machines and cause widespread damage. Mikko Hypponen, manager of anti-virus research at Helsinki-based F-Secure, said Nimda became notorious because it was the first Internet malware taking over Web sites to proliferate itself. The worm bundled several known exploits against Microsoft's Internet Information Server (IIS), Outlook mail programs, Internet Explorer (IE) browser, and operating systems such as Windows 2000 and Windows XP, both of which have IIS and IE embedded in their code. That ability allowed Nimda to swiftly spread via e-mail, unpatch Web servers, and infect local files and those on shared network drives, according to Sophos Asia-Pacific managing director Charles Cousins. Based on estimates of more than two million machines that were infected with Nimda worldwide, Michael Erbschloe, of research firm Computer Economics, initially estimated the economic impact of Nimda to have reached US$530.65 million. It has since adjusted that upwards, to US$635 million. Abby Tang, Network Associates Asia-Pacific marketing manager for McAfee Anti-Virus, said it was the industry's response to Nimda and other Internet security threats that would prove to be more significant in the long term rather than its rate of infection or amount of damage caused. She cited McAfee's development of ThreatScan - "the industry's first anti-virus focus risk assessment tool" - as a consequence of Nimda. After the Nimda worm decimated Windows-based Web servers last year, Microsoft began to thoroughly test its software products for security bugs, according to research firm Gartner. "This effort, along with that of external security experts who found flaws that Microsoft had not, exposed numerous, serious security flaws in SQL Server and forced Microsoft to issue seven vulnerability alerts since April 2002," Gartner said. After dealing with Microsoft-based security issues, anti-virus specialists are now keeping a close eye on viruses that target the Linux operating system. Discovered last Friday, the Slapper worm infects vulnerable installations of the Apache Web server on Linux environments including versions of SuSe, Mandrake, RedHat, Slackware and Debian. "We believe that Nimda, along with Code Red, has shown that today's virus writers are employing new combinations of offences against information technology infrastructure," Mr Banes said. "Mere single-point solutions will no longer be adequate to address them. It's essential to protect all parts of the network today by deploying integrated systems with anti-virus, intrusion detection and Internet firewall features." Mr Cousins, however, played down what Nimda and other blended threats portend for global Internet security. "Many anti-virus vendors predicted Nimda would inspire a whole new generation of viruses using multi-pronged methods of attack. However, this has not happened. What this shows is how difficult it is to accurately predict the viruses that are likely to be around the corner."

4. Cheating at golf a lot more fun with GPS
The Standard, 18 September 2002

"The Total Perspective Vortex is the most savage psychic torture a sentient being can undergo. When you are put into the Vortex you are given just one momentary glimpse of the entire unimaginable infinity of creation, and somewhere in it a tiny little marker, a microscopic dot on a microscopic dot, which says: 'You are here'." So wrote sci-fi seer Douglas Adams in The Restaurant at the End of the Universe. Back then, the idea of a device which could pinpoint your location in the universe amounted to nothing more than an amusing fantasy. But what you could call a prototype Total Perspective Vortex now exists in the shape of GPS (global positioning system), the US$12 billion worldwide radio-navigation system formed from a constellation of 29 satellites and their ground stations. GPS uses these man-made stars as reference points to calculate positions accurate to within a few metres. Its success stems from the Gulf War, where it was used by United States forces which would no doubt otherwise have been rapidly reduced by the featureless desert terrain to a solitary lost patrol. Consequently, the demand for GPS became so great that, by the end of the conflict, the number of commercial receivers in use in the Gulf region had risen from 1,000 to more than 9,000. GPS went on to become the navigational tool of choice in almost all military operations. To the average citizen, GPS above all means the end of in-car confrontations about how to get from point A to point B. Depending on its sophistication, your GPS system on-screen and voice instructions can locate your position on the digital map and chart a path to your destination with complete real-time route guidance and navigational instructions. If you fail to follow the original instructions and get lost, while your human travelling companion would probably start seething and cursing, a moderately sophisticated GPS system will offer you an alternative route with impeccable manners: "If possible, please make a U-turn." If you want to win admirers on the golf links and shave points off your handicap, again GPS has the answer. A GPS golf cart rig can display the exact distance to the hole and what hazards lie ahead. True, this smacks of cheating. But GPS has scores of honest applications. Connect a GPS device to a transmitter and you can then clamp it to your child or pet, thus effectively enlisting a guardian angel that can keep tabs on your darling's whereabouts. Alternatively, the technology can be used to protect a threatened species. The Mojave Desert tortoise, for example, has been kitted up to help determine population distribution patterns and possible sources of disease. GPS also plays a part in preserving the environment at large. While GPS-equipped balloons monitor polar ozone layer holes, buoys use the same technology to track major oil spills at sea. Other applications include targeted oil-drilling, intelligent transport systems and the monitoring of the use of fertiliser and pesticides. New applications keep coming. What next? The future of GPS looks as unlimited as your imagination - in which case the savage psychic torture of the Total Perspective Vortex may be just around the corner. Confused by computer jargon? E-mail technopedia@scmp.com with your questions.

5. Bond issue may cost Hutchison dearly amid worries over 3G
SCMP, 18 September 2002

Li Ka-shing, one of the world's wealthiest deal-makers, may soon find himself on the unfamiliar and uncomfortable end of a trade - paying top dollar to persuade investors to fund his flagship firm's ambitions. Mr Li's ports-to-telecommunications conglomerate, Hutchison Whampoa, will try to sell bonds worth US$2 billion within weeks, banking sources say. This is bad timing for a firm risking a ratings downgrade, whose existing bonds are near their worst levels and which analysts say may have to raise $12 billion more debt in the next 18 months. With commercial banks wary of extending fresh syndicated loans to firms with huge exposure to untested third-generation (3G) telephone technology, and equity investors pricing in the highest risk premium in 3.5 years, a bond might be the legendary trader's last best hope. "It seems it may be the lesser of all the evils," said Robert Sassoon, an analyst at SG Securities. "The jury is still out on 3G and Hutchison has been the lone voice lauding 3G investments. What the share price is saying is that very few people believe them." Bondholders are hardly disciples of 3G, driving the yield on Hutchison's benchmark bonds maturing in 2011 to a record 265 basis points above United States treasuries in recent weeks, against a tight 178 points at their launch in February last year. "Successfully launching a new issue always depends on price, but right now the risk-reward trade-off is especially important," said the head of Asian fixed-income investments at a leading fund firm. That means a new Hutchison bond deal, whether in US dollars, euros or a combination of currencies including Singapore dollars and Japanese yen might have to price at an effective yield of 300 basis points above US treasuries. Some market players say A-rated Hutchison is rushing a bond deal to beat a downgrade that would ramp funding costs higher for a firm that already has $20 billion of debt outstanding. "I don't think that argument holds. Hutchison bonds are already trading as if they've been downgraded two notches," said Albert Hofman, the head of Asian credit research at BNP Paribas. "In my opinion, they'd be wiser going to the loan market." A syndicated loan may save Hutchison at least 50 basis points in financing costs, analysts say. A new bond offer will probably be for 10 years, extending the firm's maturity profile further than a loan can. Despite the fact that the new bonds expected by the market are to be issued under the guise of funding Hutchison's acquisition of Dutch retail chain Kruidvat, it is the group's 3G telecommunications exposure that investors focus on. Analysts at JP Morgan, one of three investment banks that banking sources say have been mandated to arrange the bond sale, estimate that Hutchison is exposed to 75 per cent of 3G investment costs in Europe - a cool $17.5 billion between now and 2005. Despite worsening credit ratios, JP Morgan says Hutchison has enough cash in hand and investments to cover net financing requirements by as much as 3.5 times up to 2005. Others say the pressure is building relentlessly. "Hutchison's got to do something because they've got all those exchangeable bonds coming up and, funnily enough, people won't be converting into Vodafone shares because they are down the gurgler," said the head of debt syndicate at one European investment bank in Hong Kong. Hutchison sold $5.6 billion worth of bonds exchangeable into Vodafone stock in two deals that fall due next year and in 2004 at a premium more than three times the current price.

6. Window XP
SCMP, 18 September 2002

7. Not-so-retiring Anson keeps SAR guessing
SCMP, 8 September 2002

MORE THAN A YEAR after she stepped down from the citadel of power, Anson Chan Fang On-sang is tiptoeing her way through retire- men t. Emerging from the government headquarters where ministers were working on Monday, the former chief secretary was tight-lipped about the meeting with her successor, Donald Tsang Yarn-kuen. Outside the Hong Kong Club on Tuesday after addressing a Hong Kong Democratic Foundation luncheon, she again declined to answer questions about her speech, entitled "The way forward for the civil service". Her reticence was in contrast to her forthrightness in talking to journalists after she attended the ceremony of the fifth anniversary of the SAR on July 1. Appearing in public one day after she wrote an article in the Financial Times in which she made a stirring appeal for democratic evolution in Hong Kong, Mrs Chan was keen to gain more attention for her views on Hong Kong over the past five years and beyond. She urged people to "stand up and speak out" on the pace of democratization following warnings by Vice-Premier Qian Qichen against a too-rapid pace of universal suffrage. Expressing her concern about low spirits in the civil service, Mrs Chan has called on Chief Executive Tung Chee-hwa and his team to boost morale. Retired from the government in May last year amid speculation her departure was a result of her icy relationship with Beijing, the role of the former top official has al- ways been a subject of keen interest within political circles. Despite her repeated denials, she has been asked time and again about the possibility of her standing for election for the office of Hong Kong's third chief executive 'in 2007. Her attempts to choose the right time and occasion to "stand up and speak out" on important issues such as democracy, identity and the civil service have given rise to fresh speculation about her role in the political scene. Praised by some foreign media as the "conscience of Hong Kong"" Mrs Chan has continued to enjoy high popularity within the community. Privately, some senior officials have said the government would be in better shape if Mrs Chan were still in office. To some, she remains a symbol of the system and values of Hong Kong. Mrs Chan has apparently realized her important and unique role in times of seismic political, economic and social changes. As the government undergoes a drastic change in adopting a ministerial system in which the top layer has become open for the first time to non-civil servants, she hopes to continue to speak positively about the vital role of the civil service, particularly that of administrative officers, in governance. At a time when greater economic integration with the mainland has become an irresistible trend, Mrs Chan is keen to underscore the importance for Hong Kong of maintaining its unique status as an international city in Greater China. While she is hardly a democracy fighter, she understands the solution to address a growing democratic aspiration is not to suppress it, but to lead a community debate on a consensual approach. While seeking to make sure her voice is heard, Mrs Chan has been sensitive to criticisms that she has attempted to meddle with the Tung administration. This is particularly delicate when confidence in the ministerial system has been fragile. According to a close friend of Mrs Chan, she has felt increasingly worried about developments in Hong Kong over the past year. The friend cites as an example the re- marks made by Vice-Premier Qian. It is understood she was also concerned about the erosion of the well-established values of the civil service under the ministerial sys- -tem. The fact she has refused to stay away from the public scene may speak for itself. Chris Yeung is the Post's.Editor- at-large cyeung@scmp.com.

8. Alarm grows at record smog level
SCMP, 8 September 2002

Hong Kong's ozone pollution last month hit its highest level since records began, sparking warnings that the problem may be spiralling out of control. The Sunday Morning Post can reveal that on August 28 government environment watchdogs recorded a reading of 181 on the general air pollution index at the airport new town of Tung Chung. The previous highest reading ) 174, recorded at the roadside m Central in March 2000, measured vehicle emission pollution. The August 28 recording mea- 3ured ozone pollution, which is a mixture of different pollutants whose effects are multiplied by sunlight and calm weather. Official warnings say any reading over 100 means pollution is so bad people With respiratory problems should stay indoors. A reading of 181 places even healthy people in immediate danger and exposes them to possible long- term respiratory damage. Environmentalists say they are not surprised by the new record and have warned that it indicates a deteriorating trend of ozone pollution. The Environmental Protection Department's August 28 reading is the highest since the department began air quality monitoring in 1995. News of the reading comes after three days in the SAR when readings of more than 100 have been common. Last month, Tung Chung set the second highest record of 170. In contrast to Tung Chung, readings in other stations across the territory were all below 100 on August 28. The drastic change in the pollution reading began in Tung Chung at 2pm on August 28 when, within an hour, the index jumped from 91 to 181. According to the government, the ozone concentration reached 369 micrograms per cubic metre of air in that hour. Short-term exposure to ozone levels of more than 240 micro- grams could pose an immediate risk to health, while long-term exposure may aggravate respiratory infections and illnesses such as asthma. Symptoms exhibited by those exposed include coughing, chest pain and throat and eye irritation. Hong Kong has been experiencing a steady rise in ozone solution since 1995. The ozone average last year was 36 micrograms per cubic metre, up from 22 in 1995. Senior environmental protection officer Dave Ho Tak-yin said ozone pollution was a regional problem and was short-lived locally. "It will come in all of a sudden if the favourable condition prevails, but it is also very short- lived. In fact, the air quality in Tung Chung is not that bad. Most of the time its air quality is generally better than other places," he said. Mr Ho said the ozone pollution could only be addressed with both local and regional efforts to minimise the emission of air pollutants conducive to the formation of ozone. The Hong Kong Observatory said calm weather meant pollutants did not disperse easily. Man Chi-sum, chief executive officer of local environmental group Green Power, said the latest news had left him frustrated. 'There is no doubt that the air quality is getting worse there. But it is also wrong for the government to build a new town in Tung Chung for the benefit of its air- port development," he said. Dr Man,-said Tung Chung, located at the foot of a mountain and, facing the sea, would have air pollutants trapped during gentle sea breeze conditions. In April this year, the government agreed with the Guangdong authorities to cut emissions. The government has also introduced the LPG taxi scheme to cut dangerous exhaust emissions.

9. It was all a matter of timing for chainsaw A1
SCMP, 9 September 2002

EXECUTIVES OF COMPANIES accused of accounting fraud these days tend to get treated like public enemies. They are paraded before congressional committees. They are arrested and put through " ' ~" while cameras perp record their humiliation. And then there is Albert Dunlap, a man who loved his reputation as "Chainsaw AI", the tough executive who fired tens of thousands of people and bragged that he deserved the US$100 million he got when Scott Pa- per, a company he was credited with turning around, was sold to Kimberly-Clark in 1995. Last week, Dunlap settled a civil suit filed by the Securities and Exchange Commission by paying a US$500,000 fine and agreeing never to be an officer or director of a public company. He neither admitted nor denied the SEC's claim that he masterminded an accounting fraud when he was running Sunbeam Corp. Had that fraud erupted last month, there is little doubt that there would have been the same type of publicity that greeted the Enron, WorldCom and Adelphia debacles. But Sunbeam's ac- counting blew up in 1998, and the SEC allegations were filed m the spring of last year, when 'few really cared about accounting fraud. Dunlap's good fortune in timing did not stop there. It now turns out that the SEC believes there was funny accounting at Scott Paper when he was running it. That claim was made m March, when Kimberly-Clark agreed to a cease-and-desist order barring it from further accounting sins. The SEC concluded that 1Cimberly-Clark had hidden losses that emerged because Scott's pre-acquisition books did not reflect US$99 million in expenses. But the SEC did not emphasize the Dunlap connection, and the action came during the height of the Enron furore. Few noticed. The SEC did not discuss who at Scott know of the dubious accounting, and the commission never looked into Scott's books when Dunlap was running the company. But Dunlap is unique among executives of companies that collapsed after accounting frauds in that such allegations have dogged his career. In the 1970s, he was president of Nitec Paper, whose profits amazed the owners and led them to agree to pay him US$1.2 million. But it turned out that the profits were phoney, and Nitec filed suit claiming that Dunlap had directed an accounting fraud. Those allegations were never proven, and Dunlap put the matter behind bun by not telling future employers he had worked for Nitec. The question now is whether the Justice Department will bring criminal charges. Prosecutors will not comment, but one lawyer involved said there were rumours of new interest Fraud cases can be difficult to prove, and prosecutors may hesitate to commit the needed resources. If he were charged, Dunlap would probably claim, as he did at Nitec, that he was not an accountant and had no reasonability if the accounting was wrong. But there is little doubt that Dunlap would be facing a. criminal investigation if the Sunbeam fraud had surfaced last week. If prosecutors make no effort to build a case against him now, then one must wonder whether 11 is not the crime but the public outrage that determines prosecutorial priorities. Dunlap fooled investors for years. Had he not succeeded in concealing his past, he might never have risen to the top of American business. Had the SEC looked at Scott's books while he was there, perhaps he would have been stopped earlier. But he was not He made his millions while fictitious profits were posted and investors lost billions. If the Justice Department does nothing, Dunlap will live out his golden years as a very wealthy man.

10. S*A*R [Sorry About Reality] with Tom Hilditch and Shirley Lau
SCMP, 6 September 2002

Reclaim the Name the competition that, on a clear day, might just go on forever. Congratulations to this week's S'n'R winner, Ha Nan-fai, whose entry Sorry About Reality wins dinner for two worth $800 at Elite Concepts' award-winning Japanese restaurant Kokage [pronounced Ko-car-gay]. Oishi! Big thanks to everyone who sent in suggestion for what SAR really ought to stand for, especially the following heroic also-rans: Shenshen Abode Racke - Sylvia Telfer, Solve And Resolve - Sunlo Chlani, Severely Angst-Ridden, Sunshine Again, Rejoice - Ria Wong, Spurious Artistic Renderings [for SAR's logo contest] - Sharon Cooper, Several Answers Remain - Mona Nawani, Slaves And Rulers - John Lee, Sorry About Recession - Sandi Butchkiss, Seats Are Reserved - Evelyn Lour. Next week's best entry wins two tickets to DJ Dimitri at Star Street's intimate and super-exclusive One-fifth on Friday September 20. Tickets cost $500 - if you can get your hands on one. With Dimitri more usually to be found playing Hugh Heffner's Playboy Mansion or Kate Moss' birthday bash, this is going to be one hugely groovy event. Send all information, invitations and tips to us at: SAR@SCMP.com; fax: 2562 2485; tel:2565 2222.

11. S*A*R with tom Hilditch and Shirley Lau
SCMP, 13 September 2002

Reclaim the Name and that's all folks. It's over. Dictionaries and thesauruses have been squeezed dry. After more than 4,500 suggestions, Hong Kong has finally run out of original acronyms for SAR. Vivid proof that the end is nigh is provided by this week's barrel-scraping winner. David Meyer Mahlan's rather scary confession, Salivating At Regina (lp), is a gem. Mahlan wins two tickets to see the world's favourite lounge DJ, Dimitri, at One-fifthon Friday, September 20. Heroic also-rans ? We would like to thank everyone who participated throughout the competition's three-month lifespan. This week we really liked: Geeman Li's summary of Wan Chai reveler: Sex-starved And Randy, Sailors Always Return, Suzy Always Ready Pamela Kember's homage to Dimitri: Superstar Among Remixers. Cecilie Gamst-Berg's observation of Hong Kong's female population: Sulky And Repressed. The best suggestion for a new weekly competition will earn dessert and prosecco for six people in elite Concepts' award-winning Italian restaurant, Cinecitta in Wanchai, Valued at 500. Send all information, invitations and tips to us at: SAR@SCMP.com; fax: 2562 2485; tel:2565 2222.




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