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.
A number of Cheng’s peers still head their empires, including Hong Kong’s richest man, Li Ka-shing, the 88-year-old chairman of Cheung Kong; Lee Shau-kee, 88, of Henderson Land Development; and Macau casino magnate Stanley Ho Hung-sun, the 94-year-old chairman of Shun Tak Group.
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.
So Ngok, a former executive director of New World and New World China Land, who worked closely under Cheng as the firms began to invest in mainland China in the mid-1980s, praised the tycoon on Friday as a man of great vision.
“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.
His vision was also evident in the late 1980s. Cheng took the lead among Hong Kong tycoons in making massive investments in mainland Chinese property, infrastructure and electricity assets shortly after the bloody Tiananmen crackdown in 1989.
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.
Analysts said the well-planned succession began when Chow Tai Fook Enterprises listed on the Hong Kong stock exchange at the end of last year.
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.