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HONG KONG -- The new owner of Hong Kong's biggest phone company, PCCW Ltd., is a novice in the telecom industry -- but he's a veteran at maneuvering the halls of power in Asia.

This past week, Francis Leung, until recently a top banker at Citigroup Inc., unveiled a startling deal to buy 22.7% of PCCW for $1.18 billion, acing out two big foreign rivals for the prize. Few might have expected someone who spent the past quarter-century or so quietly brokering deals for others to suddenly best them with a deal that puts him in charge.

But in many respects, it's no surprise at all. Mr. Leung, 52 years old, has been a force behind some of the most spectacular financial events of recent decades here. In the late 1990s, he helped underwrite one of city's most sought-after initial public offerings, Internet portal tom.com, a sale so popular it drew 1,500 orders for every share offered and very nearly prompted a riot. Earlier, Mr. Leung was co-founder of Peregrine Investment Holdings Ltd., one of the most powerful finance houses in Asia -- until it collapsed during the Asian economic crisis in the late 1990s.

His recent PCCW coup sheds light on the political realities of investing in Hong Kong. Mr. Leung trumped two foreign private-equity groups, Macquarie Bank Ltd. of Australia and Texas Pacific Group's Asian arm, TPG-Newbridge, both of whom were unpopular precisely because they are overseas investors. The notion that the telecommunications infrastructure in Hong Kong, China's premier financial center, might land in foreign hands made PCCW's Chinese government-backed shareholder nervous.

Most significant, the deal put together by Mr. Leung -- a shopkeeper's son who grew up in a stone shack -- helped fix a headache for the family of Li Ka-shing, the richest man in Asia. Mr. Leung's offer provided an exit from PCCW to Mr. Li's youngest son, Richard, whose push to sell to the foreigners irked the Chinese shareholder, China Network Communications Corp. or China Netcom, which owns 20% of PCCW.

In Hong Kong, Mr. Leung and the Li family are essentially household names, and have long maintained close business ties, making the PCCW deal fodder for water-cooler gossip. As a result, some observers here have jumped to the conclusion that the elder Mr. Li's money might actually be behind Mr. Leung's PCCW purchase -- in other words, that Mr. Leung is extending the Li family a favor by putting his own face on a deal involving their money.

This past week, Mr. Leung said Li Ka-shing "has been a longtime supporter and a very good mentor to me," but wouldn't comment directly on the question of whether Mr. Li is connected with Mr. Leung's PCCW transaction. "My strengths are my intimate knowledge of the market and my connections in the business community. I am the trusted adviser to many, many important businessmen in the region," says Mr. Leung.

The younger Mr. Li -- the man who sold the PCCW stake to Mr. Leung -- said publicly in recent days that Mr. Leung "swore to me that my father is not behind the deal." The elder Mr. Li's spokeswoman declined to comment on rumors of his involvement.

It is the latest turn in the career of a man who grew up near a Hong Kong industrial site and who, through two decades of investment-banking work, rose to be Citigroup's chairman of Asian investment banking.

The only one of five children to attend university, Mr. Leung spent five years in Toronto, where he earned two degrees. When he returned to Hong Kong in 1980, he was hired on at one of the city's top investment banks, Wardley Ltd. An impressed head of personnel at Wardley, now part of HSBC PLC, said, "I think we have a future chief executive here," according to Stephen Clark, a director at Anglo-Chinese Investment Co. who worked with Mr. Leung in the 1980s. "He was largely a very solitary figure and very, very hard working."

While doing what Mr. Leung has called "donkey's work" at Wardley in 1981, he met the elder Mr. Li during the spinoff of a property unit. When Mr. Leung co-founded Peregrine in 1988, Li Ka-shing invested in the venture, as did several other Hong Kong tycoons.

At Peregrine, Mr. Leung made a name for the bank, and also minted money, by scouring China for companies to dress up and take public in Hong Kong. Deals like these transformed Peregrine into one of the city's most powerful underwriters in the 1990s. It earned Mr. Leung the nickname "father of the red chips," as the China-themed stocks he created were called.

Peregrine's rise was closely tied to Mr. Leung's "ability to get deals done with senior mainland officials," says Michael Enright, a business professor at Hong Kong University. In the recent PCCW deal, "to a certain extent he is again being a broker between Hong Kong tycoons [and] mainland interests."

During the Asian financial crisis of 1997-98, Peregrine became overexposed to Indonesian debt and collapsed. Still, Mr. Leung proved resilient. BNP Paribas bought what remained of the busted Peregrine, and hired Mr. Leung.

Peregrine's collapse was a blessing in disguise, says Mr. Leung, a devout Catholic who attends church daily, saying the crisis helped him to deepen his faith. A trusted adviser to some of Hong Kong's billionaires, he maintains a relatively simple lifestyle, living in a single apartment in a Hong Kong yuppie neighborhood.

Working with the Li family continued to buoy Mr. Leung's career. When the younger Mr. Li needed financing for his audacious takeover of the Hong Kong phone company from Cable & Wireless PLC, Mr. Leung, then at BNP Paribas Peregrine Ltd., helped pull together a $12 billion loan with three other banks to pay for much of it. It remains Asia's biggest-ever syndicated loan. The frenzied tom.com IPO was one of Mr. Li's businesses.

Sometimes, Mr. Leung's work for the Li family has been controversial. Last year, Mr. Leung, by then a senior banker at Citigroup, helped the elder Mr. Li sell a local phone company owned by his Hutchison Whampoa Ltd. to an affiliate then called Vanda Systems, sending Vanda shares skyrocketing. After the market had closed, in a deal handled by Mr. Leung, Hutchison sold Vanda stock at a huge discount, causing its shares to plunge and leaving investors with losses while Hutchison pocketed HK$1.3 billion (US$167 million).

"He obviously has a very good sense of exploiting a boom," said Mr. Clark, "although he has often left balance sheets in tatters as he has done so."