MKI hot seat warming up for Tang
IF you ring the offices of MKI Corp and ask for the chairman, a confused receptionist may put you through either to Mr Arthur Lai Cheuk-kwan or to Mr David Tang Wing-cheung.
In fact, it is Mr Tang, known for his promotion of cigar smoking and charity work, who is now chairman of MKI and its 30 per cent owned subsidiary Chesterfield.
Mr Tang took over when Mr Lai resigned in January. A week before, Mr Lai had been ordered to pay a fine of $83.9 million by the High Court after being found guilty of negligence in connection with his company ChinTung Futures and the October 1987 market crash.
''I was delighted to be able to help a friend,'' says Mr Tang, lighting a lump of tobacco nearly the size of his arm. ''Delighted to be able to do something for the company.'' Although Mr Tang has several non-executive directorships, this is his first stint at the helm of a listed company.
The environment at the offices of MKI and Chesterfield in the new Bank of China Tower is different from that in the old Bank of China Building, home of Mr Tang's China Club. He says his main job there recently has been ''hanging pictures and designing the Long March Bar''.
One of Chesterfield's subsidiaries has had to put a property on the market because of cash-flow problems, and Mr Lai's exit has meant many phone calls from companies wishing to buy Chesterfield as a listed shell. Such advances can create regulatory problems, even if they are rebuffed.
''It has obviously given rise to speculation that he [Mr Lai] is going to shut up shop and put his feet up in Bermuda,'' says Mr Tang.
''A public listing is a precious commodity,'' he says. ''We've had approaches but we are not going to sell [Chesterfield] lightly having had that much work put into it. There's a right price for everything.'' He adds that ''Chesterfield is our brother'' and that there is ''unfinished business''.
Both companies' share prices have been among the market's most volatile in the past few months, but the jumps up have largely cancelled the jumps down.
MKI's main businesses are trading and retailing, with property development growing. Chesterfield has more manufacturing businesses than MKI.
Mr Tang says his ability to get to grips with the companies and their wide range of businesses has been hampered by other commitments.
This perhaps excuses his difficulty remembering the names of other board members and the major shareholdings.
''I've assigned half a day of my life to come into this office,'' he states, adding that he intends to follow ''the philosophy as laid down by Arthur''. Mr Lai will remain an adviser.
Mr Tang says: ''I'm not a corporate acrobat. I'm not a broker, I'm not in the business of share dealings. I'm in the business of looking at businesses. I always believe in making sure that the underlying businesses are maturing and performing to budget.'' Lam Wo Enterprises, a knitwear company in which Chesterfield bought a 70 per cent stake in January last year, is selling one of its buildings for about $11 million to improve cash flow.
Two weeks ago Lam Wo and Chesterfield were pursued for $4 million by a finance company, a debt now settled.
Are the companies short of cash? ''We could do with more cash. We were going to declare a dividend [at the interim results announced in January] but we thought it more prudent not. Every growing company has a problem with cash flow.'' Relighting his cigar, he says he is keen to explore opportunities in retailing and trading.
His contribution to property deals in Chengdu, the focus of much of MKI's activity, will be limited, he agrees.
''I'm not totally ignorant, but the seat is still only slightly warm,'' he says.