Ailing Chinese Estate owner hands HK$17 billion of assets to his wife and son

PUBLISHED : Wednesday, 01 March, 2017, 6:08pm
UPDATED : Thursday, 02 March, 2017, 9:39am

Joseph Lau Luen-hung, 65, the controlling shareholder of Chinese Estates Holdings, has transferred all his 74.99 per cent shareholding with an estimated worth of HK$16.99 billion (US$2.17 billion) to his wife and son due to a “very unstable health condition”.

The share restructuring, which has been implemented and completed on Wednesday, means chairman Lau Ming-wai, the son of Joseph Lau, will indirectly hold 476.4 million shares representing 24.97 per cent in Chinese Estates through Century Frontier.

Joseph Lau has also distributed 954.2 million shares representing 50.02 per cent in the company to Sino Omen, whose shares are held by his wife Chan Hoi-wan as a trustee for her minor children Lau Chung-hok and Lau Sau-wah in the ratio of 65:35.

“In view of Joseph Lau’s very unstable health condition and the need to implement the restructuring during his lifetime, the company and all its directors confirm they are satisfied that there are exceptional circumstances for the implementation of the restructuring before the expiry of the current black out period,” according to the company’s filing to the Hong Kong stock exchange.

Substantial shareholders or senior management of listed companies are banned from reducing or raising their stakes within 30 days of a results announcement.

“(Joseph) Lau will still go ahead with the restructuring, which indicates it is his emergency succession plan and it cannot wait any longer,” said Kenny Tang Sing-hing, chief executive of Junyang Securities

The company is scheduled to announce its 2016 results on March 9.

Based on the Chinese Estates’ HK$11.88 closing price on Wednesday, Lau’s 74.99 per cent shareholding, or 1.43 billion shares, is worth HK$16.99 billion.

The share restructuring comes slightly more than two weeks after Chan Hoi-wan was appointed as executive director at Chinese Estates.

Together with the latest 50.2 per cent stake in Chinese Estates, estimated to be worth HK$11.3 billion, Chan Hoi-wan’s wealth will be boosted to about HK$50 billion, becoming the richest woman in Hong Kong.

Chinese Estates sold a residential site at No 12 Shui Fai Terrace in Mid-Levels East for HK$1.05 billion to Chan Hoi-wan in January. In the same month, Joseph Lau also gave the retail complex at commercial building The One, in Tsim Sha Tsui, which is worth HK$18 billion, as a gift to his wife.

Separately Chinese Estates - via its indirect wholly-owned subsidiary New Silver - agreed to sell a number of commercial retail outlets at Lowu Commercial Plaza in Shenzhen to his son, Lau Ming-wai, for HK$500 million in January.

Tang said it was too early to assess the impact of the change in shareholding with Chan Hoi-wan, who now holds more than 50 per cent, as the majority shareholder.

“The new management team may have a different strategy and we need time to observe,” he said.

Joseph Lau had also been receiving special dividend payments from Chinese Estates whenever it disposes of assets, according to Tang.

Over the past 13 years, Lau has received HK$35 billion in dividends from Chinese Estates

In spite of the health concerns, Lau has unseated Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen of Sun Hung Kai Properties to rank fourth among Hong Kong’s 50 richest people, according to Forbes’ annual list of individuals and families that control the most wealth in the city.

Although suffering from renal failure, heart disease and diabetes, and occasionally bedridden over the last year, Lau managed to grow his net worth by US$2.4 billion to US$15.5 billion.