Reorganisation
Mr. Shangkong
by

Whose city will Hong Kong be after Li Ka-shing family is gone?

Li Ka-shing reorganisation fuels speculation he is exiting the city, but who would take his place

PUBLISHED : Monday, 12 January, 2015, 4:00am
UPDATED : Monday, 12 January, 2015, 9:39am

For decades Hong Kong had the nickname "Li Family City", using the same Cantonese pronunciation as Li Ka-shing, the city's richest man.

Philosophically speaking, nothing stays the same forever. So, following Li's latest decision to reorganise his business empire, the question is whether he still likes the idea of Hong Kong being called "his city".

This is a subject Li, the chairman of Cheung Kong (Holdings) and Hutchison Whampoa, has faced for the past few years whenever he was asked about his retirement plans, or about the more politically sensitive subject of the relationship between Hong Kong and the mainland.

Or in other words, how much trust Beijing would continue to have in Hong Kong tycoons such as Li - which would have important and long-term impact on Li's business empire in Hong Kong and around the world.

Li surprised the market on Friday by deciding to reorganise his business empire into two new groups - one for property-related assets and the other for assets such as natural resources, telecommunications and infrastructure. Many non-property investments are already outside Hong Kong and the mainland.

Perhaps the most interesting detail in the reorganisation is the two new groups will be incorporated in the Cayman Islands, a British overseas territory in the Caribbean which is known as a tax haven for many multinational corporations.

Asked if such a move would be considered a retreat from Hong Kong, Li denied it.

Well, it was not the first time Li has denied such speculation. He has always said he loved Hong Kong and as a man in his 80s, he would not leave the city to live in a foreign country for retirement.

In the past two years, Li had repeatedly denied he would change the registration of his key businesses from Hong Kong to foreign countries.

On September 18, 2013, his comments about keeping his businesses incorporated in Hong Kong, amid speculation he had become disappointed at Beijing's policies over Hong Kong, occupied about one-fourth of the news page in the People's Daily, the mouthpiece of the Communist Party. This was a clear signal of how Beijing was also concerned about Li's future plans for his hugely valued family businesses.

But what about the future for Li's two sons? When the time comes, they will have unlimited possibilities in reorganising the family businesses, inside or outside Hong Kong.

Perhaps the more interesting hypothesis is if we think about what Hong Kong will look like in the next 50 years - and if we assume Li will sooner or later sell some of his assets in Hong Kong for profit-making reasons - who will be the buyers? In other words, if Hong Kong is no longer a "Li Family City", then whose Hong Kong will it be?

 

George Chen is the SCMP's financial editor and a Yale World Fellow. Mr. Shangkong columns appear every Monday. Follow @george_chen on Twitter or visit facebook.com/mrshangkong

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