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SCMP Reporter

MALAYSIAN tycoon Robert Kuok Hock-nien says he has handed over the reins of his business empire to his sons in the run-up to tomorrow's public offering of shares in Shangri-la Asia.

  Mr Kuok said that he had retired on April 1 this year and did not manage the daily business of his empire, although he was still the chairman of Kerry Holdings.

  It is believed that Mr Kuok has handed over the reins of the group to his eldest son Mr Kuok Khoon Chen, 38, who is now staying in Hongkong. While his second son, Mr Kuok Khoon Ean, 37, would concentrate on the family's business in Malaysia and Singapore. The two sons are both directors of the Kuok Group.

  ''I am getting old and I have retired already,'' said Mr Kuok.

  Shangri-la Asia's prospectus, which will be released tomorrow, includes a proviso that the group may buy further hotels in China from the Kuok family. This has worried analysts who believe that further injection will affect the company's performance.

  However, Mr Pho Ba Quan, chairman and managing director of Shangri-la Asia stressed that although the company had the option to buy from the Kuok Group any future hotel business in Hongkong and China, they would exercise the right based on the prevailingsituation.

  Since most of Shangri-la Asia's hotels in China are not making a profit at the moment, the analysts are concerned about the dividend payout by the company. But Mr Quan stressed that the profit contribution of Island and Kowloon Shangri-la hotels were more than adequate to pay the dividends approved by the board.

  The Kuok family is negotiating to purchase a four-star hotel in Xian, and they will construct a US$150 million-hotel in Fuzhou, one three-star hotel and four-star hotel in Shenyang, one hotel in Changchun and one hotel in Harbin which is under negotiation.

    Mr Quan disagreed with the idea that the Kuok family wanted to cash in on their investment through this flotation.

  ''We would like to raise funds for our development. It's hard to say [the Kuok family will] cash-in since they'll still hold 58.7 per cent of the shares,'' he said.

  The Kuok's flagship firm in Hongkong is under the name of Kerry Holdings. Mr Kuok explained the origin of the company's name.

  ''When we first came to Hongkong, we were in a bit of a hurry to start the business. Therefore, we just chose a shell company from a name list in a law firm,'' said Mr Kuok.

  The Malaysian tycoon said that he started from scratch when he was young. At 68, he still often travels between China, Hongkong and Malaysia.

  But he said, ''Although I was born and brought up in Malaysia, I'm now a Hongkong citizen.''   Shangri-la Asia claims to be ''a China play hotel stock'', according to Mr Quan, because of its hotel business in China and its mainland-backed shareholders.

  Mr Quan stressed that six hotels in China and the two hotels in Hongkong were wholly-owned by Shangri-la Asia. The original partners of these hotels would eventually become its shareholders. And the shareholdings of these partners will account for 26.3 per cent of the shareholding of the company.

  Therefore, the Kuok Group will hold 58.7 per cent of Shangri-la Asia, the public 15 per cent, and the mainland partners the rest.

  The China entities include China Resources, Ministry of Foreign Economic Relations and Trade (MOFERT), China International Trust and Investment Corporation and Zhejiang International Trust and Investment Corporation and China National Metals and MineralsImport and Export Corporation.

  Also, since Swire Properties holds 20 per cent of Island Shangri-la it will eventually become one of the shareholders of the company.

  Mr Quan said many of the mainland operations will start contributing profit in 1995, especially the hotels in Shanghai, Beijing and even Shenzhen.

     The company has a mixed track record. It reported a loss of $51.5 million in 1991 and $9.4 million in 1990 because of the events of June 1989 on the mainland and the Gulf War. Therefore, analysts are concerned about the degree of risk in this stock.



Kuok hands over reins to his sons