Chan's rise shows he was not left out in the cold
We were remiss in yesterday's column to allow Ronnie Chan's remarks about not being left anything by his father to go unchallenged. He was, you may recall, giving advice on how to avoid the intra-family asset haggling that is tearing Stanley Ho's family apart.
Chan (below) said one way to avoid this is not to give the children anything, observing that his father gave him nothing. Strictly speaking this may be true - he did not inherit the company. After his father, Chan Tseng-hsi, and a co-founder of Hang Lung Group died in 1986, his brother Thomas Chen Tseng-tao became chairman until he retired in 1990 and Ronnie Chan took over.
In the 1980s, Hang Lung was in the first division of Hong Kong's property companies, so to speak, though it has since slipped into the second division.
Chan joined the firm in 1972 at about 23 and has risen to chairman. When the son of the founder makes it to the top of the family firm, you have to conclude he hasn't exactly been left out in the cold.
Be powerful and multiply
Stanley Ho's family problems have drawn attention to the practice of polygamy among rich and powerful Chinese gentlemen. So, it is interesting to see what another powerful Chinese gentleman in his 80s has to say. In his latest book, Hard Truths To Keep Singapore Going, Singapore's Lee Kuan Yew, although not polygamous himself, appears to approve of the practice.
'The Chinese have a position more in keeping with what happens in the animal kingdom. I'm successful, I'm powerful, I multiply. You're weak, you're no good, you're sterile. You have no women, I have a harem. The net result is, the next generation, many get their genes from the bright and energetic.
'The Chinese emperor, at the end of every imperial examination ... chose the top scholar to marry his daughter. It didn't matter whether the scholar married any number of concubines after that. The emperor wanted the royal family to be infused with good genes. It is selective breeding ... of course this is repulsive to western liberals. They want to pretend that all men are equal.'
Some of this thinking is reflected in Singapore government policy. While Lee was prime minister, the government set up the Social Development Unit (SDU) in an effort to encourage graduates of the opposite sex to get together and multiply. Although the emphasis was more on monogamous rather than polygamous marriages.
Check your market
Azim Premji, chairman of Wipro, has been amusing the illuminati gathered at Davos with a story that illustrates how Western companies hoping to make a killing in India's burgeoning markets sometimes do not quite get it. He says that when Ford Motor moved into India, the company took the step of reducing a US$20,000 car to US$15,000 by cutting some features to make it cheaper and therefore more acceptable to the market.
One measure was to get rid of the rear electric windows. What Ford failed to realise was that Indians who could afford a US$15,000 car were also likely to have a driver.
They were less than impressed by the hired help enjoying the use of automatic windows in the front while the boss was left with a manual winder in the back.
Davos has been graced by the presence of Oleg Deripaska, chief executive and key shareholder of Hong Kong-listed Rusal. He was evidently feeling optimistic, telling reporters that within four years the company would have practically no debt. 'The level of debt will be so insignificant, it won't be worth mentioning,' he told Bloomberg.
When Rusal listed in January last year, it had debts of US$14.7 billion, which had been reduced to US$11.75 billion when the company announced its third-quarter earnings in November. That's a repayment rate of about US$1 billion per quarter, and may well leave it debt free by 2014.
Tales of the rich
It's ironic to see the Securities and Futures Commission report on poor corporate governance in the initial public offering sector, given that commodities trading giant Glencore International is eyeing the city for a US$2.5 billion listing. In a recent interview, founder Marc Rich told a Swiss newspaper that he would not have listed the company if it was up to him because 'then you don't have to give information'.
Rich founded Glencore in 1974, but fled the US in 1983 after being indicted on charges of racketeering, income tax evasion and selling oil to Iran in the late 1970s, but was pardoned by US president Bill Clinton in 2001. He sold the company (which at the time bore his name) in 1993, and it was renamed Glencore.