True visionary: Hong Kong tycoon Cheng Yu-tung was quick to spot an opportunity ... and know when to stand aside
Cheng Yu-tung built up a vast jewellery and property empire before stepping back and putting a much-praised succession plan in place
Billionaire Cheng Yu-tung, who died on Thursday aged 91, made his fortune half a century ago from jewellery and property, amassing the third largest fortune in Hong Kong.
He was the first of the city’s ageing property tycoons to step down from leading the businesses they had largely built from scratch during the boom years of the 1960s and 1970s, handing power to a new generation and winning the praise of analysts for showing such rare vision.
Cheng had been in poor health for a number of years, suffering a stroke in September 2012 that shocked the market. It happened just seven months after he announced his retirement by relinquishing both his posts as chairman and executive director of New World Development, the company he founded in 1970.
“I feel very sad. I could not have got my job done in China at the time without his guidance and support,” he said.
In an earlier interview So said of Cheng: “He does not blindly invest. His shark guts [tenacity] comes only when he sees an opportunity.”
Cheng’s vision and guts were first evident in his investment in jewellery – his Chow Tai Fook Enterprise became the biggest jewellery store chain in the world.
As a result, the New World group of companies established a huge investment presence on the mainland.
When New World China Land was listed on the Hong Kong exchange in 1999, it had a land bank of 20 million sq ft. The firm, which was taken private by New World Development in August, remains one of the biggest developers on the mainland, according to So.
Born in August 1925, Cheng, like many tycoons, did not come from a rich family. He fled Guangdong during the second world war, escaping to Macau in 1940 where he worked as a trainee at Chow Tai Fook, the gold shop of his future father-in-law, Chow Chi-yuen.
In 1989, Cheng retired as managing director of New World Development and handed the reins to his son Henry Cheng Kar-shun. But overaggressive expansion and mismanagement led to the firm racking up debts of HK$25 billion, so Cheng returned a year later to restore investor confidence.
He retired for good on February 29, 2012.
With son Henry Cheng in place as chairman of New World Development, grandson Adrian Cheng Chi-kong, a Harvard graduate and former Goldman Sachs banker, was made an executive director and joint general manager.
Adrian Cheng oversees the group’s daily operations and business strategy.
Henry’s daughter, Sonia Cheng Chi-man, chief executive of the Rosewood Hotel Group, oversees the group’s hotel and project management divisions.
Cheng’s plan was intended to avoid a repeat of the family feuds at other empires, such as the battles between the three Kwok brothers of Sun Hung Kai Properties and the wrangling among the Ho clan.
In 2008 the tycoon was awarded a Grand Bauhinia Medal – the highest honour in Hong Kong
Cheng had four children and enjoyed good relations with other tycoons in the city – his circle of golf and poker partners included Lee and Ho.
