Keeping it within the Family

Dec 15, 2008
*Special to asia!
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As Asia’s two richest men near their 80s, bets are on whether their prodigal sons will return to take over the family businesses.


"A stubborn son does not waste away the family fortune."

--- an old Chinese saying

In their rare, quiet moments, Li Ka-shing and Chang Yung-fa – two of Asia's richest and most feared businessmen – may sit back and savour the wisdom behind the maxim.

From it they could seek solace that neither of their stubborn sons – Richard Li and Chang Kuo-wei – are spendthrifts, unlike so many of the rich Asian kids who risk blowing away their familial billions. They may even feel proud that their sons have chosen to strike out on their own, instead of taking the easy path of working for their fathers.

But most of the time, Li and Chang have their hands full, dealing with their rebellious sons.

Li, whom Forbes recently ranked as the world’s ninth richest man with a personal estimated net worth of US$23 billion, steers the helm of property giant Cheung Kong Holdings and ports-and-retailing-and-telecom conglomerate Hutchison Whampoa. Chang, who started life as a sailor, is the founder and owner of Evergreen, one of the world’s biggest container fleets; and Eva Air, Taiwan’s second-largest airline.

Li recently celebrated his 75th birthday, while Chang hits 80 this month. At their age, succession has become an urgent matter. Global in their business outlook as they may be, Li and Chang remain traditionally Chinese at heart – especially where legacy is concerned, they would want to pass their businesses on to their sons, to carry on the family name.

It is on this issue, more than others, that Richard Li and Chang Kuo-wei have defied their fathers.

Both Richard and Kuo-wei have had stunning careers while working under their fathers, earning market accolades for their business acumen, innovation and appetite for risk-taking that’s reminiscent of their fathers’ entrepreneurial glories. But neither has stayed on in the family business.

Richard, 41, now runs his own little empire, investing in technology, real estate, financial services; as well as Hong Kong's largest fixed-line telephone operator, PCCW. For more than a decade, he has had very little to do with Cheung Kong/Hutchinson.

Which was all well and fine until recently, when Richard decided to declare his support for pro-democracy and anti-Beijing activist, Anson Chan, who is seeking election for a legislative seat in December.

That Richard should be seen next to Chan, grinning when the latter announced her candidacy – and reportedly offering to finance her entire campaign – caused massive embarrassment to his father, whose close ties with Beijing and Hong Kong’s current Chief Executive Donald Tsang have been key to his businesses in the territory and the mainland.

Unrepentant, Richard has even gone on record to voice his support for universal suffrage for Hong Kong. Every time Richard opens his mouth, the joke now goes, Li has to spend large amounts on damage control. Further, what may be now mere embarrassment could grow into something much more serious if Chan, as expected, wins the seat and uses that as a platform to run for chief executive in 2012.

Across the water, Chang is facing similar problems with his youngest and favourite son.

Kuo-wei, 36, left Eva Air last year when his father objected to his marriage to an air stewardess of the carrier, After many stormy confrontations between father and son, Kuo-wei quit his job and walked away. Recently following the birth of his son, he also returned his shares in Evergreen (worth US$60m-100m) back to Chang, and now runs an unspecified business.

Cheung Kong/Hutchinson and Evergreen/Eva are huge entities and fixtures on many stock indices. While it is true that Li and Chang run them like family firms, their fortunes affect a large segment of the people in Taiwan and Hong Kong.

Li’s elder son, Victor, is already in the family business; as is Kuo-cheng, the third of Chang’s four sons. But while there’s no doubt Victor and Kuo-cheng are conscientious and generally capable, they are viewed as untested and – despite having been given many responsibilities – have yet to be able to emerge from their fathers’ overwhelming shadows. The concern now is they never will.

Investors question whether Victor and Kuo-cheng can successfully manage something as large, and as complicated and political as Cheung Kong/Hutchinson and Evergreen/Eva once their fathers pass from the scene. Given the choice, many would prefer Richard and Kuo-wei to run the show directly, or at least have a big say in the businesses.

Given their age, should the elder Li and Chang want to bring their prodigal sons back to their fold, they would have to do it soon. That would require some swallowing of pride and compromise-making – a mighty task for traditional Chinese fathers.


lee han shihLee Han Shih is the founder, publisher and editor of asia! Magazine.


Contact Han Shih