Rise of the new media moguls
Food tycoon and aspiring media mogul Tsai Eng-meng has assumed the title of Taiwan's richest person this year.
Boosted by his mainland-based business, the outspoken chairman of food company Want Want China has seen his net worth rise to an estimated US$8 billion from US$6.1 billion last year, Forbes magazine reported last month.
Tsai ranked third on Forbes' Taiwan rich list last year, but the rice cracker empire he has been building on the mainland since 1994 propelled him to the top this year, supplanting Cher Wang, chairwoman of smartphone maker HTC.
She fell to 8th place as her combined wealth with husband Chen Wen-chi plummeted by nearly two-thirds to US$3.05 billion amid stiff competition from rivals Apple and Samsung.
Tsai and Wang both have reputations for dogged persistency and their support for stable cross-strait relations. Both backed Taiwanese President Ma Ying-jeou's campaign for a second four-year term because of his policy of engagement with the mainland. Both consequently have faced calls from the island's proindependence camp for consumers to boycott their firms' products.
They have also taken a strong interest in the mass media after establishing their business empires, but analysts say their approaches have been very different.
Tsai, 55, established his food empire by producing snacks, rice crackers, dairy products and juices on the mainland, with revenue rising to US$2.9 billion last year.
'On the strength of that business, plus his expanding interests in media, real estate, insurance and financial services, Tsai's estimated fortune climbed to US$8 billion,' Forbes said.
The mainland-based Hurun Research Institute recently named Tsai the wealthiest expatriate on the mainland.
With only a junior high school education but a will of steel, Tsai's path to success contrasts markedly with that of other Taiwanese billionaires, who accumulated their wealth through years of effort in the island's hi-tech, communications or financial services sectors.
Unlike Wang's late father, plastics tycoon Wang Yung-ching, who was raised in a poor family, Tsai had a comfortable upbringing. When he was 19, he offered to run a food firm for his father, who did not have time to take care of a canned fish business acquired from a friend. Without even knowing what a balance sheet was, he lost more than NT$100 million - a sum that could buy almost 700 apartments in Taipei at the time.
That business failure turned Tsai from a highly confident young man into a laughing stock among friends and family. 'At that time, I was so depressed that I almost wanted to kill myself,' he told Taipei's Business Week magazine in 2009.
But friends said the failure helped Tsai grow from a know-nothing, well-to-do youth into a man determined to keep fighting for success.
'He has never been a school type of guy, but he has this keen sense of where a business is and once he is in it, he will never give up,' said former SinoPac president Paul Lo, a friend of Tsai's for more than 25 years. Tsai has always described going to university as a waste of time.
In 1981, Tsai struck upon an idea to make good use of the island's rice surplus and sought to co-operate with a Japanese firm to produce rice crackers. It took him two years to acquire the know-how from Iwatsuka Confectionery Company, one of the top three Japanese rice cracker manufacturers, and develop a market in Taiwan. For its part, Iwatsuka received 5 per cent of Want Want common stock.
The rice cracker business became a great success for Tsai, who astutely turned the product into one of the most popular offerings to Buddhist and Taoist deities.
By 1992, when Want Want had captured 85 per cent of Taiwan's market for rice crackers, the then 35-year-old Tsai decided to invest in the mainland. 'I don't speak English, and if I didn't go to the mainland, where else could I go?' he said, when asked what had prompted his decision.
It proved to be another astute move for Tsai. Since opening his first factory in Changsha , Hunan in 1994, Want Want's mainland business empire has grown to more than 120 factories in 26 provinces.
Tsai made his first foray into the media business in late 2008, buying the financially troubled China Times group, which included two major newspapers, a weekly magazine, and two television stations (one terrestrial and the other cable), for NT$20.4 billion (HK$5.3 billion). He snapped it up just ahead of Jimmy Lai Chee-ying, the owner of Hong Kong's Next Media group.
In early 2009, Tsai turned his attention to Hong Kong's media sector, signing a preliminary deal with Alnery, a firm that controls 47.58 per cent of free-to-air broadcaster Asia Television (ATV), to inject HK$1 billion in the form of convertible bonds.
Tsai hoped to build a media empire in China - including Taiwan and Hong Kong - to increase his influence in the region. 'All I want is to air more happy television programmes to entertain all ethnic Chinese people who have been working hard,' Tsai said when asked to explain his motive for investing in ATV.
But continuing debate over the control of ATV with the station's original owner, Payson Cha Mou-sing, and Shanghai property tycoon Wong Ching's abrupt entry into the fight for a controlling stake have kept Tsai from increasing his media influence in Hong Kong and realising his dream of a media empire in China.
Back home, he recently tried to acquire a 60 per cent stake in Taiwan's largest cable operator, China Network Systems, prompting some scholars and critics to question his media ambitions. They suspect that Tsai might want to use his Taiwanese media outlets for political and commercial gain.
Forbes noted that the scale of Tsai's media ambitions in Taiwan and his unabashed goodwill towards the mainland have inevitably stirred criticism from industry rivals and Taiwanese democrats, especially after a blunder in an interview with The Washington Post this year. He antagonised pro-democracy activists in Taiwan and abroad by saying that the events in Beijing's Tiananmen Square in June 1989 did not constitute a 'massacre'.
That triggered an angry protest from Wang Dan , a student leader during the pro-democracy protests in Beijing, who now teaches in Taiwan.
Tsai's comments about cross-strait unification - 'whether you like it or not, unification is going to happen sooner or later' - also caused an uproar in the island's pro-independence camp.
Though Tsai later claimed The Washington Post interview had been 'distorted and taken out of context', his comments triggered the call by his critics, including more than 60 academics and intellectuals in Taiwan, for a boycott of Want Want products and its Taiwanese media outlets.
Taiwanese critics have also alleged that Beijing could be backing Tsai's purchase of media outlets on the island. Taiwan's security law prohibits purchases or investment in the media sector by mainlanders and mainland organisations.
In the less than four years since Tsai bought the China Times group's media outlets, a wave of senior journalists and editors have resigned over what they claim is increasing 'mainland influence' in the media.
'In the past several years, Want Want China Times group has continuously violated Taiwan's law by placing advertorials of Chinese government agencies in its media outlets,' said Chang Chin-hua, professor of journalism at National Taiwan University in Taipei. She also said there had been a number of 'embedded' stories from the mainland published under the guise of objective journalism.
But Tsai has flatly denied that the mainland has played any role in his media ventures in Taiwan.
At a recent public hearing organised by the island's National Communications Commission on whether to approve his plan to buy the cable network operator, Tsai said: 'Taiwan is my home and I love Taiwan.'
He said the mainland had never given his media ventures a single cent or favoured him by approving his investments in various commercial businesses.
The commission is still reviewing Want Want's media acquisition plans in light of persistent opposition from civic groups and academics.
While Tsai's China media ambitions have faced obstacles, Cher Wang has meanwhile successfully secured a deal with Hong Kong's dominant broadcaster, Television Broadcasts (TVB), that could help her realise her ambitions.
Wang's media ambitions first surfaced in 2007 when she invested in the setting up of movie distribution firm CatchPlay in San Jose, California. CatchPlay has since become a leading online film distributor in China.
She since tied up with Hong Kong venture capitalist Charles Chan Kwok-keung and American private equity firm Providence Equity Partners to acquire a 26 per cent controlling stake in TVB on March 31 last year.
The HK$6.26 billion deal has given Wang and her partners seats on the board of the world's largest Chinese-language television programme distributor as non-executive directors. It also led to entertainment conglomerate Shaw Brothers (Hong Kong) losing control of TVB, which it founded in 1967 and developed into the most popular broadcaster in Hong Kong and southern China.
Market analyst Huang Jih-tsan said the investment was wise, given TVB's popularity in Hong Kong and that the station is among the rare external media outlets allowed to be aired on the mainland. 'The purchase has also allowed her to gain access to Taiwan's popular cable network TVBS, which operates three cable channels, 100 per cent owned by Hong Kong-based TVB,' Huang said.
The amount of money, in US dollars, MBK Partners is looking to sell its 60 per cent stake in China Network Systems to Tsai Eng-meng for