Li begins to lay his paper trail (FT.com)

Less than a year before he snatched Cable & Wireless Hong Kong Telecom from rival bidder Singapore Telecommunications, Richard Li had his eyes on a different prize - the South China Morning Post, Hong Kong's leading English-language paper.

On the lookout for editorial talent, Mr Li set up a meeting in the spring of 1999 with Seth Faison, then the New York Times' Shanghai bureau chief. Mr Faison had worked for the Post in the late 1980s when it was owned by Rupert Murdoch, opening the paper's Beijing bureau in 1988 and covering the Tiananmen Square protests and massacre a year later. During a long lunch, Mr Li confided to Mr Faison his designs on the Post, including potential spin-offs of its classified, online and other units.

"He was not interested in editorial policy, or even the news," Mr Faison told the FT. "He was focused on the business possibilities."

Because of the market mania at the time, the two spoke in code. "It was all highly amusing," Mr Faison added. "I had to swear before the lunch that I would not mention the name of the SCMP [Post] as we talked, in Mr Li's private dining room, because he was afraid that his waiters would eavesdrop and then go out and buy the stock." Throughout the conversation they referred to the Post as "Company C".

According to other people familiar with the advance, the Post was just one of many Hong Kong media assets in which Mr Li had expressed interest. In the end, however, it was not for sale. The Post's controlling shareholder, Robert Kuok, declined Mr Li's bid, and PCCW's acquisition of Cable & Wireless HKT in February 2000 took the young tycoon down a different path.

Mr Li's interest in telecoms has since waned.

If all goes according to schedule, he will resign his position as PCCW's chairman by early December. That is when Francis Leung, one of Hong Kong's leading investment bankers, is supposed to make the first of three payments totalling $1.2bn to acquire a controlling 23 per cent stake in PCCW from Mr Li.

But Mr Li's passion for media remains, as evidenced by last week's confirmation of his long-expected acquisition of a stake in one of the old ladies of Hong Kong's Chinese language press, the Hong Kong Economic Journal.

It is a small deal for a small newspaper, especially considering the money that will be coming Mr Li's way from the PCCW stake sale. According to people familiar with the transaction, an offshore trust established by Mr Li will pay only about $30m for a 50 per cent interest in the newspaper.

It is also an odd match, considering that Mr Li is as colourful a character as the Journal is staid. The paper has a circulation of about 30,000 - roughly 10 per cent that of Hong Kong's most popular mass dailies, the Oriental Daily News and the Apple Daily. Reflecting its stodginess, it resisted for many years such technological innovations as the colour photograph.

But the highbrow Journal punches well above its weight and is closely read by senior Hong Kong government officials and corporate executives. In 2003, the publication was a leading voice in a successful popular revolt that blocked the introduction of strict national security legislation.

Mr Li, according to people familiar with the discussions, was in intermittent contact with the Journal's owners - columnists Lam Shan-muk, Cho Chi-ming and Mr Lam's wife, Lok Yau-mui - over a three-year period. When negotiations began in earnest late last year, a price was agreed within a month.

The real difficulty lay in coming up with a deal structure that would reassure the paper's staff that its editorial independence would be maintained. "It is hard to write editorial independence [provisions] into a commercial contract," Mr Cho says. To address staff concerns, Mr Li invested at arm's length through a trust and it was agreed that Ms Lok will have the final say on editorial matters.

"The Hong Kong Economic Journal is a gem worth preserving," Mr Li noted in a statement last week. "It has a great reputation and it is fiercely loyal to its independence."