We of Humble Origin
Tycoons have long been at pains to establish their status as self-made men of humble origin. As seen above, the regimes of Suharto and Marcos did produce genuine working-class-to-billionaire stories as the dictators reached for unknown outsiders to become their trusty accomplices in divvying up the economic spoils of power. But this was not the norm in more settled political climes. If there is a class stereotype for Southeast Asian godfatherdom, it would be that of a rapid-cycling economic aristocracy.
A well-known Chinese proverb refers to three-generation wealth, in which one generation makes a fortune, the next holds on to it and the next loses it. Actual experience in the past hundred years points to a four-generation sequence, in which the first generation establishes a kernel of capital that a second generation, with improved ties to political power, leverages into a serious fortune. A third generation then tries to hold on to an extremely diversified range of assets that reflect the unique personality and relationships of the father. By the fourth generation a lack of application to this task, the decay of the original relationships on which the empire was built, and the inherent weakness of businesses based on family rather than professional management bring the edifice down.
One-generation, rags-to-riches stories are exceptional. The domestic economies of Southeast Asia are far too closely controlled by governments to make such a thing likely. As Adrian Zecha, a Chinese–Dutch–Malay–Czech– Thai–German–Indonesian luxury hotelier and socialite who knows most of the contemporary tycoons, says of the path to godfatherdom: ‘In one generation it is very difficult because it is not an open economic society. You get that in America. To a lesser extent in the UK. To a lesser extent still in continental Europe.’
Wang Gungwu, a prolific writer on the overseas Chinese based at the National University of Singapore, concurs: ‘I have yet to find a businessman who started as a coolie.’
Despite this, there is a long tycoon tradition of mythologizing a humble background and a struggle to escape the clutches of poverty. A classic example is Thailand’s richest businessman, and recent premier, Thaksin Shinawatra. In speeches and official publications Thaksin relates tales of a hard-scrabble upbringing and underfunded schools with broken equipment. He proclaimed in a speech in Manila in 2003: ‘Through my modest family background … I learned the hardship of poverty in the rural areas. I learned the importance of earning rewards by working hard.’
In reality, Thaksin’s family is a well-established dynasty from Chiang Mai that was involved in tax farming before 1932, and moved into the silk business as well as finance, construction and real estate thereafter. Thaksin himself went through the best local schools and military academies and married a general’s daughter. His rise through the ranks of the Thai police force and access to state concessions were very much an insider’s story.
In Hong Kong, Asia’s richest tycoon, Li Ka-shing, revels in his reputation as the son of a schoolteacher who arrived in Hong Kong penniless in 1940. The official website of his Cheung Kong Holdings instead states: ‘Shouldering the responsibility of looking after the livelihood of the family, Mr Li was forced to leave school before the age of 15 and found a job in a plastics trading company where he labored 16 hours a day. By 1950, his hard work, prudence and his pursuit of excellence had enabled him to start his own company, Cheung Kong Industries.’
In reality, Li went to school for a couple of years and then started working for a wealthy uncle (from the family that owns Hong Kong’s Chung Nam Watch Co.). Subsequently he became part of an important subcategory of tycoons who got ahead, in part, by marrying the boss’s daughter. Li’s late wife, Amy Chong Yuet-ming, was a first cousin – the wealthy uncle’s daughter. The business where Li worked in fact belonged to his father-in-law; and what Li did was to build the operation up. According to a long-time intimate of Li’s, his mother-in-law also gave him additional financial backing.
Marrying the boss’s daughter is not uncommon in godfather development. One well-known example is Singapore’s Lee Kong Chian, who in 1920 married Tan Kah Kee’s daughter and prospered for the next seven years as treasurer of the old man’s business before breaking out on his own. C. Y. Tung, founder of the shipping company Orient Overseas Line and father of Hong Kong’s first post-colonial chief executive, Tung Chee-hwa, married into money in the form of Shanghai’s wealthy Koo family.
Among the current generation, Cheng Yutung of the New World group married into Hong Kong’s ubiquitous Chow Taifook jewellery business; the company remains his key private vehicle. For the would-be godfather who cannot rely on his father’s wealth to prime a career in business, the recourse has been the wealth of a wife’s family.
There should be no great surprise about this given the social élitism of Southeast Asian societies. Yet it is curious how bound up tycoons are with the rags-to-riches myth. Sir David Li, billionaire head of the Bank of East Asia family in Hong Kong and normally an astute observer of the world around him, is adamant that many tycoons are self-made. Reaching for examples, he cites the film and television magnate Sir Run Run Shaw, Lee Shau-kee of Henderson Land and Henry Fok.
But Run Run Shaw and his brothers are sons of a Shanghai textile magnate, Lee Shau-kee comes from a wealthy banking and gold trading family from Shuntak county in Guangdong province, and Henry Fok – though from a genuinely working-class background – was set apart by a British government scholarship to an élite school.
Without a Marcos or a Suharto to shake things up, Asian godfathers are not the products of great social mobility. The notion that they are, however, is part and parcel of the tycoons’ self-image. It is important to their personal sense of pride and it is critical to the maintenance of authoritarian political structures and unfree markets in the region which constrain opportunities for many other talented entrepreneurs.
Selective Frugality
Something that further confuses the popular image of the tycoons is their reputation for thrift. Part of this is justified and another part is very much for public consumption. The genuine thrift is that which reflects an entrepreneur’s instinctive desire to preserve capital. As one lifelong Asian investment banker and tycoon intimate observes: ‘They are better at denying themselves immediate earthly rewards than your average investment banker.’
As an example, Robert Kuok bought a mansion on Hong Kong’s Deep Water Bay Road (a sort of Tycoon Alley close to a nine-hole golf course favored by the godfathers for their early morning rounds) during the Asian financial crisis for the knock-down price of HK$80 million. He tried living in the house but, according to family members, became obsessed with the notion that the property was excessive, even for a man worth several billion dollars. Eventually he knocked the house down, built five modest townhouses in its place, took one for himself, two for his family and rented out two more. Kuok lives in the kind of house that in Europe or the United States would be associated with a modestly successful bank manager.
Godfathers are also keen to telegraph useful messages to employees and service providers. An investment banker in Malaysia recalls a meeting in London in 1999 with Lim Kok Thay, son of gaming billionaire Lim Goh Tong, to seal the US$2 billion acquisition of Norwegian Cruise Line. Leaving the lawyers’ office in the City, Kok Thay hailed a taxi which the banker assumed would take them to Heathrow airport for a flight they were due to catch to Norway. After half a mile, however, the billionaire heir ordered the cab to stop and ushered the party into an entrance to the London Underground. He saved a few pounds by riding the train to the airport. Once at Heathrow, the nonplussed investment banker found the group were booked into economy class seats for the flight to Oslo.36
K S Li (as Li Ka-shing is often known in Hong Kong) likes to point to his modest appetites by reminding people about the cheap Seiko and Citizen brand watches he has worn over the years – ‘that fucking watch’, as one of his executives who has heard the reference once too often remembers. A cheap timepiece has become his symbol. In a rare interview with Fortune magazine, Li inevitably wheeled out the watch theme: ‘Yours is more luxurious,’ he pointed out to the interviewer. ‘Mine is cheaper, less than US$50.’
Apart from the instinct to preserve capital, and the sensible business tactic of displaying thrift to employees, however, there is a good deal of cant about the supposedly modest lifestyle of the average godfather. Another source of public pride for Li Ka-shing is the fact that he draws tiny salaries from his public companies – just HK$10,000 from his flagship Cheung Kong Holdings in 2005. It is never mentioned that in Hong Kong there is tax on salaries but not dividends, so there is a tax-avoidance incentive for tycoons to live off the latter.
Peter Churchouse, a former managing director at Morgan Stanley in Hong Kong, points to the case of one of K. S. Li’s peers: ‘Lee Shau-kee,’ he says, ‘has been taking US$150 million to US$300 million in dividends just from [flagship company] Henderson [Land] for twenty years.’ Among other things, Lee has used the money to buy 30,000 apartments in the United States. These are not, in the final analysis, men living off small incomes.
The real, secret profligacy of the tycoon fraternity is their high-stakes gambling. Most members of the tycoon fraternity claim that all other members (not themselves, naturally) are at it all the time. ‘They’re all big gamblers,’ says one Hong Kong-based billionaire. ‘The only ones who are not big gamblers are [gambling godfathers] Stanley Ho and Henry Fok.’
Investment bankers in Hong Kong and Singapore trade endless rumors of golf games played for US$1 million a hole. Or vast losses accumulated on gaming trips to Australia and the US. Of course, nothing makes it into the media because tycoons do not make bets in public. But the rumors are legion and suggest a form of gambling that echoes that of Middle Eastern potentates – vast sums of money blown away by people who do not know its real value because they have not really earned it.
Big Daddy
What is incontrovertibly true about the godfathers is that they hold to male-dominant, patriarchal traditions of the family with a vengeance. In running family businesses they demand total obedience from relatives and use a variety of tactics to secure it. Among the most effective is to keep children and other relatives loyal with the prospect of vast inheritances, while simultaneously keeping them cash-poor.
Ng Teng Fong, Singapore’s biggest private landlord and multibillionaire, is not untypical. His eldest son Robert runs Sino Land, the Hong Kong end of the family operation and itself one of the half dozen biggest developers in the territory. Robert, educated at an English boarding school and now in his fifties, still lives in an apartment rented from the company and owns only about US$1 million of Sino Land equity.
Meanwhile his father telephones each day to check on the business’s cash balances. Younger brother Philip is kept on a similarly tight leash in Singapore.
Michael Vatikiotis, former editor of the Far Eastern Economic Review and the journalist who gained closest access to Thailand’s reclusive Chearavanont family, recalls having dinner with the patriarch and his middle-aged sons, who were not allowed to speak. An investment banker who has worked with the Chearavanonts paints a similar picture, in which the sons find ‘they have to beg for a new car’.
Another factor that ensures patriarch power in Chinese families is that there are no rules as to who will take over what part of the family fortune. It is a common misperception that there is some form of primogeniture at work. In reality, an eldest son is only a business heir if he is deemed worthy of the position. It is quite normal to pick a different sibling, although males always come before females.
Malaysian casino magnate Lim Goh Tong, for instance, chose Lim Kok Thay over his elder brother. Indonesia’s Liem Sioe Liong bypassed his eldest son Albert when he designated Anthony Salim as heir. Henry Fok sidelined his eldest son Timothy in favor of his sibling Ian. Younger sons are less likely to disappear when they know they are not necessarily out of the running to become the big boss.
The culture of the family business can be stifling, and is often a recipe for much unhappiness, but it is almost never challenged. Moreover this cuts across all kinds of sociologies, unaffected, for instance, by whether a family is mixed-race or whether the godfather went to a colonial school. The patriarch is always king. On the outside this manifests itself in what Helmut Sohmen, the Austrian son-in-law of the late shipping magnate Y K Pao, calls ‘the love of pre-eminence’. The same notion is captured in K S Li’s frequent description of himself as ‘the friendly lion’.
In this respect, the Southeast Asian tycoon aspires to benign godfather status. But while this may be possible in terms of public perception, actual authority within families – and often companies – is all too often wielded by mundane bullying. The middle-aged children of major tycoons like K. S. Li and Robert Kuok live in fear of their fathers’ outbursts. An executive of Li’s recalls his eldest son Victor dozing off in a meeting to be awoken as if by electric shock by his screaming father. Board members at the South China Morning Post, controlled by Robert Kuok, were not sure where to look at an infamous February 2003 board meeting when the patriarch lost his temper with son Ean, then aged 48, bawling him out in front of a room full of directors. Another Hong Kong-based multi- billionaire, meanwhile, has been seeking to control his outbursts with the help of a behavioral therapist.
Billionaires are by definition busy people and it is expecting a lot of them that they should achieve what has become known as a ‘work–life’ balance. But the unbridled, unquestioned power of the patriarch is a corrupting influence on family relationships. K. S. Li’s younger son Richard has been a rare example of semi-active rebellion. He was sent away to boarding school aged twelve and his mother is widely believed in Hong Kong to have committed suicide.
An unauthorised Chinese-language biography published in 2004, which can only have been informed by Richard Li’s inner circle, dwells on his close relationship with his mother, the process by which he set up his own company and then took over Hong Kong Telecom without informing his father, and the fact that he describes Lee Kuan Yew – not Li Ka-shing – as his hero. The message to a Chinese audience is extremely clear: that father and son do not fit the harmonious cultural stereotype.
Tim Fok, eldest son of Henry Fok, gives away something of the nature of tycoon family life when he describes the bizarre experience of coming home from English public school for the holidays aged sixteen and being sent off by his father to buy the first Hitachi jetfoils for the Hong Kong–Macau ferry route. It is difficult not to sense that there is an element of bitterness when he concludes: ‘I think my father was more interested in going to nightclubs.’
Nothing defines the godfather’s power within the family as much as his license to indulge his sexual appetite at will. Henry Fok, who died in 2006, and Stanley Ho both took several wives – polygamy was not outlawed in Hong Kong until the Marriage Reform Ordinance of 1971. Many tycoons enjoy multiple mistresses and copious amounts of extramarital sex. One of the richest men in Asia is remarkably candid in saying that in the godfather lifestyle sexual liaisons are the main punctuation between periods of time spent at the office: ‘It’s all business,’ he says. ‘None of these people has social friends. They fuck a girl, shake off their horniness and then it’s back to work.’
Of course he is not quite candid enough to admit the observation applies to him as well, though a member of his family assures that it does: ‘If they don’t have a woman a day they can’t function,’ the person says of the tycoon fraternity.
It would be unduly prurient to dwell on the mechanics of how seventy- and eighty-year-old men organise a constant supply of fresh sexual activity, but suffice it to say that billionaires who own entire blocks of apartments, hotel chains and gin palace yachts have plenty of private space away from home.
There is a long tradition of the godfather-as-stud. Pre-war Indonesian tycoon Oei Tiong Ham’s daughter wrote of her father: ‘All his life he had great interest in women and sex. He had eighteen acknowledged concubines and a total of forty-two children by them.’Today’s peer group is somewhat more modest, though Indonesia’s Eka Tjipta Widjaya is associated with at least thirty children. Stanley Ho has only seventeen acknowledged children.
Nonetheless, the Asian tycoon still enjoys unusual sexual licence. As one veteran Hong Kong investment banker puts it: ‘Sexual rapaciousness is endemic to their culture … the fact that their wives say nothing about it sets them apart from Western billionaires’. This does not mean, however, that children are unaffected. What is noticeable in several godfather families is how resentful and affected male children have become because of their father’s sexual profligacy and its effect on their mothers. What is equally noticeable is that those male children have grown up to be sexual profligates themselves.
Power without Accountability
The final component of the standard godfather make-up is secrecy. This is almost invariably presented as a reflection of Asian and Chinese culture, not least by the tycoons themselves. A 1991 Robert Kuok letter to the Far Eastern Economic Review refusing an interview is typical. ‘The average Chinese,’ wrote Kuok, ‘is publicity shy for various reasons, is averse to indulging in washing linen in public and, consequently, also averse to dealing with the media.’
But behind the recourse to cultural defences by thoroughly cosmopolitan men like Robert Kuok lies a larger truth: that dealmakers such as him and secrecy go hand in hand in any society. It is worth remembering how the old private banks that dominated international finance in London and New York at the end of the nineteenth century – Warburg, Rothschild, Morgan and others – did not even put nameplates outside their headquarters. The main office of J. P. Morgan & Company at the corner of Broad and Wall in Lower Manhattan had nothing more than the number 23 on the door.
Men like J. Pierpont Morgan lived in a world where business was determined by relationships and insider information. As a result, as Morgan’s biographer Ron Chernow writes: ‘The old Wall Street felt under no obligation to explain itself either to small investors or the citizenry at large.’ Such is the case in Southeast Asia. Most deals involve some element of government licensing or concession, things that both parties prefer to keep private.
Domestic markets are heavily cartelised and it is rare that a non-participating business will make a public challenge to a cartel as part of a campaign to break into its activity; Asia’s diversified conglomerates all benefit from cartels and so are dissuaded from complaining in public about specific arrangements that irk them.
And it is only since the Asian financial crisis that there has been the beginning of a movement of shareholder activism in the region. In sum, tycoons have been able to maintain a low profile because they have not had to fight for markets – only concessions – and their shareholders have traditionally been passive.
Secrecy, of course, is myth-compounding. Someone like Malaysia’s Quek Leng Chan is, in his hazy public image, the archetypal inscrutable Chinese tycoon, hidden away in a penthouse on the top of his Hong Leong office tower in Kuala Lumpur. But Quek is also a cigar-chomping barrister who was called to the bar at Middle Temple, one of London’s four Inns of Court. His family is now thoroughly anglicized. Cousin Kwek Leng Beng, a hotel and real estate tycoon based in Singapore, also read law in the UK, graduating from the University of London.
Kwek can be even more secretive than his cousin. He is infamous at shareholder meetings for refusing to take questions and reading only prepared statements. But is this because he, like his cousin, is ethnic Chinese, or because they are both extremely cosmopolitan but can get away with behavior that would not be tolerated in US or European markets?
Perhaps the most powerful argument against notions of inherent tycoon modesty in Asia is that their relationship to publicity is far more subtle than their simply wanting to avoid the media. When one does gain access to godfathers, it is striking how often the big boss’s corporate waiting area is filled with literature of the most narcissistic kind.
In the course of interviews for this book, copies of Fortune, Forbes and the Far Eastern Economic Review in the era when it was a Dow Jones weekly – and featured endless fawning lists of ‘outperforming’ Asian companies – were much the most common literature on display. Titles like Fortune and Forbes are also those to which the tycoons are prone to grant their rare and not terribly searching public interviews.
The notion of the egoless Asian godfather is difficult to sustain. It is telling that the first thing Li Ka-shing, master of the image of public reticence, does when he arrives at the office in the morning is to read the papers – those in Chinese directly, with those in English having been translated into Chinese for him. His office keeps copies of articles about him and he is partial to the use of a highlighter pen and margin notes when confronted with those who would criticise him.
According to managers of Hong Kong newspapers, anything Mr Li takes serious exception to translates into curtailment of advertising expenditure by his companies. Li businesses stopped advertising with Next magazine and its sister publication Apple Daily after investigations into the circumstances surrounding the death of his wife.
But less speculative reporting can produce the same results. A mention of Li’s 1986 censure for insider trading, for instance, in the South China Morning Post in November 2003 – almost two decades later – led to an immediate drop-off in Li company advertisements placed with the paper.
There is one, undeniably good, reason for Asian godfathers to stay out of public view: there has for several decades in Southeast Asia been a problem with the kidnapping of businessmen – usually ones with some Chinese ethnicity, and often with the involvement of Chinese criminal gangs. The Philippines has the biggest problem. John Gokongwei, a pure Chinese tycoon who runs the eponymous J. G. Summit conglomerate, had his daughter Robina kidnapped in 1981, and in 1997 lost his son-in-law, Ignacio Earl Ong, when police fired hundreds of rounds into a car in which he was being sequestered.
The Philippines averages more than one hundred kidnappings a year. Elsewhere the threat is less acute, but not to be underestimated. A cousin of Robert Kwok’s – who looks not unlike him – was kidnapped in Malaysia in a case of mistaken identity; in a tale that is probably apocryphal, friends of the family say that Robert Kwok paid the ransom and then asked his cousin to pay him back.
In the mid 1990s kidnapping took a spectacular turn in Hong Kong with the arrival of mainland Chinese triad-connected gangs. The group of ‘Big Spender’ Cheung Tze-keung in 1996 grabbed Walter Kwok of the Sun Hung Kai real estate family and kept him in what Walter has privately described as a ‘box’ for five days, until he was ransomed. The experience strained relations with Walter’s two brothers, whom he perhaps suspected of spending too much time haggling over the price.
In 1997, Big Spender and colleagues seized Li Ka-shing’s eldest son Victor, demanding HK$1 billion for his return. According to persons close to the Li household, there ensued an experience that would have been comic had it not also been very dangerous. Like the Kwoks, the Li family decided not to tell the police. Instead, K S Li turned to trusted colleagues and employees to withdraw HK$1 billion from Hong Kong banks at short notice, which is not an easy thing to do. Big Spender, an extremely reckless individual, then turned up at Li’s home above Deep Water Bay to collect the swag. He had not reckoned, however, with the physical volume of the money. He could not fit it all in his car and so took one lot, then came back a second time for the rest.
The last laugh, none the less, was on the kidnapper. He was picked up with many of his followers across the border in China, was tried behind closed doors and executed in December 1998. Rumor was rife in Hong Kong that K S Li and his private security personnel – headed by a former commissioner of the Hong Kong police – had wanted Big Spender arrested in China proper so that he could be executed. The Hong Kong government – which does not impose the death penalty – made no effort to seek extradition over what were crimes committed in its jurisdiction.
Tycoon chief executive Tung Chee-hwa said Big Spender was being tried for crimes ‘planned’ in China. Few people in Hong Kong were sympathetic to the dead man, and his kidnappings are a reminder that godfather families do have reason to think about their security. But the kidnap threat does not go far in explaining the broader culture of secrecy among the tycoons.
In Conclusion
The history of Asian godfathers has always been one of men who could adjust their identities in chameleon fashion. The ethnic division of political and economic power required this. Colonialism required this. And most recently, for ethnic Chinese tycoons, the re-emergence of China, with its manipulative appeals for ‘patriotic’ overseas Chinese, required this. The tycoon has long been habituated to ‘get in character’ as needs dictate.
At one level this is part of the ‘game’ of Asian business to which the tycoon set, conscious or unconscious of the full import of the metaphor, frequently refers. Henry Fok’s eldest son Tim, for instance, encapsulates his father’s career as follows: ‘It’s not about money,’ he says. ‘It’s a game.’ A member of Robert Kuok’s family, explaining the futility of the 83-year-old tycoon’s three attempts to retire over the past fifteen years, observes: ‘Why stop doing business and start playing golf? It’s only another game.’
And Helmut Sohmen sums up the motivation of his late father-in-law Y K Pao in the same terms: ‘He liked the game, he liked the work.’
The game is indeed a lot of fun when a concession is won or a deal comes off. But the contortions of identity to which the godfathers have traditionally submitted themselves have not made for peace of mind. There is no shortage of circumstantial evidence – from the craving for titles and official rank to the recourse to evangelical Christianity – that many of the tycoons are in search of their true identity.
This is particularly apparent to the large number of outsiders who have married into ethnic Chinese godfather families in the past half century. Helmut Sohmen, the Austrian who married the eldest of Y K Pao’s four daughters, Anna, remarks wryly of the identity struggle: ‘Give it another generation and maybe people will stop thinking about what it means to be Chinese.
For now the struggle goes on, leaving some curious impressions. In one instance, the author visited the office of a truculently Chinese billionaire in Hong Kong to find it, unsurprisingly, filled with the most stereotypical pictorial and furniture trappings of ‘Chinese-ness’. Unexpectedly invited back to the godfather’s home, however, what was striking was that there were almost no Chinese cultural ‘markers’ to be found: the walls were decorated with nondescript European art; one rather bad painting, bizarrely, still had the sales label on the front.
Still more perplexing was an outburst from the tycoon – a man reputed to follow Chinese superstitions in an almost comic book manner when making business decisions – as he berated one of his children for wasting time with a Chinese medical therapy. ‘I don’t believe in it,’ he snapped. Does this mean the man’s life is a deliberate sham? Almost certainly not. What it points to is a billionaire living with a mixed cultural identity and far from at ease with himself.
The godfather state of mind is not helped by the fact that they are usually completely out of touch with what is known as the real world. In this respect the rags-to-riches fable is particularly misleading because it implies the average godfather has experience of ordinary life. In reality the Hong Kong or Singapore billionaire knows no more about life on the cities’ public housing estates than the Malaysian billionaire cocooned in Kuala Lumpur knows of life in the Malay kampong, or village.
Bernard Chan, a grandson of Chin Sophonpanich from the Hong Kong side of the Bangkok Bank family, has – for a tycoon-heir – a highly unusual interest in social policy. He tells of a perhaps unique expedition he organised to introduce a group of older godfathers to the poverty that is widespread among the city’s elderly. He took them far from their own mansions on Hong Kong island and into the estates beyond the Kowloon peninsula. ‘Each one of them was shocked,’ Chan says, as they met people who rent bunk beds by the night. They were oblivious to the fact that such poverty exists in Hong Kong. But the point of the story is the reaction of one of the wealthiest men in Hong Kong. In an attempt to provide helpful policy advice, he suggested that the poor be relocated to mainland China where their limited spending power would go further. There was no consideration of whether social or medical services in mainland China would be adequate, or whether people were willing to go.
Bernard Chan refuses to confirm who the tycoon was; another person party to the trip says it was one of the born-again Kwok brothers. A manager who has spent many years working for Hong Kong godfathers says of their relationship to everyday life: ‘The perception is that tycoons know what it is like. They have no idea.