The son also rises

PUBLISHED : Saturday, 13 February, 2010, 12:00am
UPDATED : Saturday, 13 February, 2010, 12:00am

Sir Jack Cohen, one of Britain's most successful businessmen and founder of the Tesco grocery chain, became famous for his views on nepotism following the appointment of Leslie Porter as its managing director. 'I don't understand all this talk about nepotism,' Sir Jack said, 'the boy's only my son-in-law.' As it happens, Porter turned out to be an extremely successful manager. Sir Jack had something of a sense of humour until he discovered that the usual path of nepotism was obscured by his son-in-law's genuine talent, meaning that he had to relinquish control of the company.

This sort of thing rarely happens in Hong Kong, where control over some of the largest listed companies is passed not to their most able managers but to the sons (rarely the daughters) of the tycoons whose entrepreneurial ability created these institutions. The record of this inheritance - with a few notable exceptions - is largely dismal; the sons fail to match up to their fathers and things get even worse when they are deluded enough to launch off in new directions, believing that their entrepreneurial gene pool is strong enough to carry them to success.

More or less everyone in Hong Kong is familiar with this pattern, except, as ever, the government. Now we learn from Lau Siu-kai, the head of the Central Policy Unit, that the increasing number of princelings being appointed to this government think tank's advisory committees has nothing to do with family connections but is attributable to their increased participation in business and public affairs.

So the circle has been squared. The princelings, drawn from influential business and political families, have risen on the back of nepotism and are now being officially told that their appointment to government bodies has been achieved purely on the basis of merit. The beneficiaries of nepotism are so gloriously lacking in self awareness that they have even gone out and founded little clubs to promote themselves, such as the marvellously named Y. Elites Group.

Were it not for the fact that they are running major public companies and being solicited for government advisory posts, this would all be very amusing. But minority shareholders in the companies they have inherited need to think seriously about retaining investments in corporations which shun managerial talent in favour of family ties. And the public at large has every right to be wary of a government so desperate to appease the tycoons that it prefers to follow their nepotistic practices rather than search for real talent in the community.

In some ways, the government on the mainland has devised a far better way of accommodating office seekers who can only offer a limited contribution to public affairs. At both national and provincial level, there is a network of Chinese People's Political Consultative Committees, offering literally thousands of posts as rewards for good behaviour. Members of these bodies get to attend meetings and meet state leaders, are given fancy certificates to display in their offices and have only one really simple function to perform: to say yes whenever called upon to do so.

Sometimes they hold what are billed as discussions, usually in the form of carefully scripted monologues but, on the whole, everything runs smoothly and they do no great harm.

To remove any possible doubt over the essentially meaningless status of these committees in the governance of China, it should be remembered that the hapless Tung Chee-hwa went directly from his abruptly truncated role as chief executive of Hong Kong to serve as one of the many CPPCC vice-chairmen.

Meanwhile, the Communist Party is becoming increasingly wary of the flagrant nepotism that flourished, notably, under the leadership of Jiang Zemin. But, in Hong Kong, where the lap dogs are so keen to emulate their masters in every way, they have not quite caught up with the new trend and maintain an almost touching belief that anything the tycoons do must be good and therefore copied.

Alternatively, and more worrying, is the thought that the Hong Kong government is determined to reduce all its advisory bodies to the level of the CPPCCs, where even princelings can do no harm.

Stephen Vines is a Hong Kong-based journalist and entrepreneur