D was quick to get his hands on the Spectrum or "Speccy", a computer launched in 1982 with up to 48 kilobytes of memory and rubber keys. Before he turned 18, he had written a book, "Supercharge Your Spectrum", showing how to get the most out of the contraption with his favourite machine-code tricks and techniques. What set him apart from other tinkerers was how he spent the royalties. He would cycle to his bank in Oxford to place an order in London for some shares. ("Which stock, young man, do you want to buy?")
That interest led naturally to a career in investment banking. His methodical mind mastered what you might call the machine code of capitalism: the rules, regulations and economic principles that make markets work, holding firms accountable to their customers and their owners. In 1991 he applied the same curiosity to Hong Kong, where he moved for a two-year stint that never ended. "I loved the place," he says. By the time the Asian financial crisis rattled the city seven years later, Mr Webb had made enough money to retire. So in his early 30s he began trying to debug Hong Kong capitalism, sharing his favourite tricks and techniques via his website (webb-site.com) and a newsletter that now attracts over 30,000 subscribers.
At a farewell event hosted by the Foreign Correspondents' Club in Hong Kong on May 12th, Mr Webb, who is battling cancer, was philosophical about his achievements. Sometimes he changed things for the better; on other occasions he delayed a change for the worse. "That's also a win," he said.
Hong Kong was often celebrated as a bastion of economic liberty. But when Mr Webb began his crusades, its corporate governance was "lousy", he says. Corporate reporting was slow and scanty. Shareholders had to wait four months for a two-page summary of a firm's yearly results and another month for the annual report. At the same time, shareholder meetings were fast and perfunctory. Even important motions were often passed on a show of hands, no matter how many shares each "hand" represented. Big business dominated the legislature and the listing committee that sets rules for companies on the stockmarket.
In 2003 he exploited a "wrinkle" in the company law inherited from Britain, which allowed five shareholders to demand a formal poll on company resolutions. He bought ten shares in each of the companies in the Hang Seng index, Hong Kong's main stockmarket benchmark, dividing them between himself, his wife and three firms he owned. With that foothold, he could oblige companies to conduct polls properly: one share, one vote. He also threatened to publish the results himself if they did not. His extra five shares allowed him to appoint proxies to appear at the meeting alongside him. He offered these five places to the press, which was otherwise barred from many meetings. "Tickets will be scarcer than the Rolling Stones," he joked. Some journalists took up the invitation, mostly because they wanted to see what he, rather than the company, was up to.
Listed companies have to disclose "significant investments", including shareholdings in other firms. At Mr Webb's urging, the regulator began to enforce the rule. That let him map out a web of holdings among 50 firms he dubbed the Enigma Network. A company might borrow from another on advantageous terms with no intention to repay, or dilute the stakes of independent investors by issuing lots of shares, snapped up at a discount by insiders if minority shareholders did not fork out for them. An umbrella-maker issued 75bn shares ("in case everyone on Earth wants ten", as Mr Webb put it). In 2017, six weeks after he published his map, the shares of many Enigma firms crashed.
He also fought a rear-guard action against weighted voting rights, which allow firms to issue special shares that carry more clout. He feared this would further entrench tycoons, allowing their control to exceed their ownership stake. But Hong Kong's exchange was keen to attract Chinese tech companies led by celebrity founders, which are often popular even with minority investors.
Not all sharebuyers take much interest in capitalism's inner workings. Many simply want exposure to a stock's returns, even without the other rights of ownership. They are happy to free-ride on the efforts of more careful stewards of capital, such as Mr Webb. Capitalism in Hong Kong works better thanks to him. And it would work better still if more capitalists were like him. ■
