Pioneer who built a corporate giant

PUBLISHED : Friday, 25 September, 2009, 12:00am
UPDATED : Friday, 25 September, 2009, 12:00am

Liu Chuanzhi is known for his pioneering role in building up corporate China.

Liu, 65, founded the Lenovo Group in 1984, then known as Legend, along with 10 other like-minded engineers from the Chinese Academy of Sciences. The start-up built on an initial cash pool of 200,000 yuan allocated by the academy, the mainland's top state-owned technology research and development agency. Lenovo has become the world's fourth largest personal computer maker, helped by a 2004 acquisition of IBM's computer unit, sitting on HK$40 billion of market capitalisation.

Other government-controlled PC makers from that time have either disappeared or been reduced to suppliers for multinationals. But the business family under the Lenovo aegis remains alive and well - and increasingly diversified.

Apart from its PC business, which was floated on the Hong Kong exchange in 1994, Legend Holdings, the parent of Lenovo, now also controls two private equity firms with more than 7 billion yuan (HK$7.9 billion) of funds combined under management. Digital China, the PC manufacturer's spin-off, was also floated in Hong Kong and has grown into one of the country's leading IT service providers.

The huge leap owed much to Liu's careful steering throughout the years. He has weathered a fall-out with some of the fellow founding members of the empire over the direction of the company, avoided being scuttled by rapidly changing market demands, and took the lead in tapping international capital markets to fuel further growth.

In a politically risky environment, Liu's efforts to privatise the business empire have resulted in improved business efficiency.

Liu's long-running battle to dilute the academy's shares in Lenovo, beginning in the early 1990s, have come a long way. Mainly thanks to Liu's years of efforts, a group of elite employees have acquired 35 per cent of Lenovo Holdings, the parent of all the business units under the brand, and the academy was convinced to sell half of its holdings to a private investor this month, a milestone deal that saw private owners take the upper hand for the first time.

Hard drive

Liu Chuanzhi has built Lenovo into the world's fourth largest PC maker

The company's market capitalisation, in Hong Kong dollars, is: $40b