Man Enough For My Lesbian Daughter?

Cecil Sze-Tsung Chao is no ordinary Hong Kong billionaire property tycoon. He is more like what you would get if you crossed Donald Trump, Hugh Hefner and a Chinese munchkin. Now 76 years old, he has famously remained a bachelor his entire life, more so that he could bed “10,000 women,” by his own estimate, during those years. The union of his loins with one of those multitudes yielded a lovely young girl, Gigi, now 33 years old (top right, with elf-dog), As beautiful and smart as she is (she holds an architecture degree from the University of Manchester, in the UK), she has one clear flaw in her father’s eyes. She (like he) seems to prefer the company of women. Gigi is a declared lesbian. Last week, she announced in Beijing that she had married her seven-year girlfriend, Sean Eav (pictured with Gigi), in a civil union in France.

This situation proved intolerable to Cecil Chao. He has responded assertively, in perhaps the only way that he knows how – by throwing money at his problem. Lots of it - HK$500 million, or almost US$65 million, in fact. The money is set up as a reward for any man from anywhere who can win Gigi’s hand in marriage and set her “straight". This may be the first time that Mr. Chao is using his money to seek the services of a man, but who knows.

Not surprisingly, the announcement has been met with a huge response. Candidates have flooded Gigi’s Facebook and Twitter accounts with over 1,500 requests. Suitors have ranged from the presumably straight-and-narrow earnest types to those simply taking a flyer. There is a Frenchman who has declared himself “soft as a woman.” An internet user proposes bringing along “a gorgeous Brazilian model” to accompany him. There is a gay American, who obviously is not very good at understanding the job requirements.

Gigi has responded with much eyeball rolling and a plea for a return to privacy and sanity. With a dad like that, I presume that she knows it’s just wishful thinking.

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And the World’s Most Expensive Retail Street Award goes to...

Fifth Avenue, New York? Bond Street, London? The Ginza, Tokyo? Wrong. Russell Street, Hong Kong. At US$2,800 a square foot per year in Q2 2012, this Causeway Bay address has the highest retail rents in the world. Ouch. Fifth Avenue comes in second, at US$2,500 per sq foot. Furthermore, despite the sluggish global economic conditions, the lease rates rose over 13% quarter-on-quarter from Q1 2012. Clearly, retail therapy is still an oft-prescribed remedy for the wealth blues on the Mainland. With these rents, it’s safe to assume that shop owners are not selling trinkets and everyday household items. Want a humble slice of bread? Let them eat Belgian chocolate cake with truffle cream. Want some threads? Burberry’s welcomes you to its 7,000 sq ft store. Want to catch a flick? Oh sorry, the theater is now a Tiffany’s. Fancy gazing at a three-carat VVS1 E-colored pear-shaped rock instead?

The story of astronomical rents is consistent in prime shopping locations across Hong Kong. Average rents have risen between 25 to 50% over the past year, to over US$920 per sq ft. The next highest country is Argentina, at almost half that average. Shoppers for ordinary goods are being driven more and more into side streets, upper floors or dodgier neighborhoods. Selection is down and prices are up. There is much head shaking among consumers.

Discontentment with the influence of Chinese politics and money has swelled with the rents over the past two years. It’s unclear if and when either will dissipate. In a recent protest against government policies, a man was seen waving a British Union Jack flag, in a nostalgic moment recalling Hong Kong’s colonial past. Presumably, the flag didn’t have a Burberry label.

ASIA-PACIFIC: Land of the Most Plenty

Well done, Asia-Pacific! In 2011, the region passed North America to lay claim for the first time as the place with the most high net-worth individuals, according to a just-released report by Capgemini and RBC Wealth Management. Asia had already eclipsed Europe in 2010. “High net worth” is defined as having “investable assets of US$1 million, excluding primary residence, collectibles and goods that can be consumed.”

But before Asians raise their self-celebratory glasses of baijiu/soju/sake/shiraz too high, they should consider that the report’s definition of Asia-Pacific includes Japan and Australia. Given how Japan sometimes behaves towards its neighbors (otherwise known as the Erstwhile Colonies), it is debatable whether Japan sees itself as part of the rest of Asia, and vice-versa. Sometimes it seems that Japan is its own planet, one that orbits an independent rising sun. Certainly, many marketeers see Japan as being a distinct place for business. In regards to the Aussies, it is also debatable whether they see themselves as part of Asia, other than as a matter of economic convenience. Of course, if the Chinese continue to buy up the mineral and fossil fuel resources Down Under at the pace that they’ve shown over the past few years, then never mind what the above-ground Aussies might think – the earth under their feet could very well be part of Asia. Excluding Japan and Australia (which together with China accounted for 75% of the number of wealthy), there’s little doubt that Asia still lags behind North America, and possibly even Europe.

But definitions aside, there are some noteworthy trends to chew on, like morsels of gingko nuts:

- There were 3.4 million of these lucky individuals across the region.

- However, while the number of millionaires rose, their overall investable wealth declined, by 1.1%, to US$10.7 trillion. As shown in the above chart, most of the declines occurred in India and Hong Kong.

- Thailand, Australia and Indonesia experienced the most percentage growth. Australians and Indonesians benefited from their natural resources bonanza. Thais were better off (despite devastating floods in November) due to the economic rebound that accompanied a more stable political environment; the country experienced far fewer scenes of red and yellow shirts bashing each other into an orange mess, as in earlier years.

- Indonesia was the only market where the MSCI equity index (a measure of stock price performance) was up.

It is difficult to predict how 2012 may turn out. Asia may retain its lead, but it’s tough to tell. China is down, but Hong Kong is back up, as are other Asian markets. And, the US has continued to crawl out of its sub-prime hole, so North America may reclaim its crown. In any event, 2011 was a watershed year for Asia’s wealthy. And it certainly will not be the only time when the region’s numbers will outstrip those from elsewhere.

Did You Hear the One About the Chinese Driver Who...

Okay, we all know the stereotypes and jokes about bad Asian drivers. But the following two related stories are real. And if they weren’t about such tragic issues, they might be re-worked into one-liners about young, spoiled Chinese drivers and their expensive toys.


Story 1: Political Scandal in China Over Playboy's Ferrari Crash

In the early hours of March 18 – just three days after the Communist Party sacked Bo Xilai as party chief of Chongqing – a Ferrari 458 Italia speeding through the streets of Beijing smashed into a wall, rebounded and crushed a railing on the opposite side of the road. One naked body and two half-naked bodies were thrown from the wreckage. The male driver, one of the half-naked bodies, died on the spot. The other two bodies, both young women, were seriously injured. After almost six months of news cover-up, it is now emerging in the media that the driver was the twenty-something year old son of Ling Jihua, a close aid of Chinese President Hu Jintao. Around the world, high speed sex parties in Ferrari’s are, sadly, nothing new. But in this extended season of discontent among the Chinese masses towards an ongoing litany of moral and legal transgressions by the country’s elite, this incident, and the government’s attempt to hush it up, is particularly lurid.


Story 2: Ferrari Ownership in Hong Kong Restricted for Drivers Under-28 Years Old

According to an article today in the South China Morning Post, insurance companies in Hong Kong will not offer coverage policies for Ferraris to anyone under 28 years old. Apparently, the car dealers and insurance companies have become alarmed at the rising number of accidents across Asia involving young drivers with more money, testosterone and arrogance than brains. In May of this year, a 31-year old Chinese man in Singapore killed himself and two others when he slammed his Ferrari into a taxi. More recently in Thailand, a grandson of the Red Bull drink creator ran his Ferrari over a policeman. Late last year in Japan, in perhaps the biggest traffic incident involving luxury speedsters of its kind, eight Ferraris and a Lamborghini Diablo were among 14 cars that crashed into each other, creating a terribly expensive pile of scrap metal and shredded carbon fiber. Lastly, there is the well-known story of Cantopop star Nicholas Tse, who in 2002 crashed his Ferrari, then placed the blame on his chauffeur, and ended up getting off lightly anyway.

Going forward in Hong Kong, if Junior wants a tony new set of wheels, someone else (presumably Dad) will have to register and insure the car. So Dad will be putting his name where only his money used to be. Perhaps then, if Junior screws up and wrecks the car, he’ll need to walk or take a minibus home to face his spanking.

The consequences of an ill-advised high speed menage-a-trois.

So...

Q: What do you call a rich young Chinese guy behind the wheel of a late-model Ferrari?

A: No laughing matter.

A K-Pop Mega-Hit About Seoul’s 1%

In case you either a) have been living under a rock, b) were shipped off to Mars aboard the Curiosity, or c) as a matter of principle or necessity, associate yourself with nothing cooler than a tepid glass of English beer, you may have missed the recent phenomenon of “Gangnam Style”. If so, this blog posting will enliven your existence. “Gangnam Style” does not refer to a fashion magazine for triad members. Rather, it is the name of a K-Pop music video and hip-hop tune that has become the summer’s most talked-about pop music event – not just in Korea, but globally. It is the first music video from Asia that has received over 100 million hits. It has been profiled in a CNN news segment. It has been played to a raucous crowd at Dodger Stadium. Jay Leno of The Tonight Show in the US used it to spoof Mitt Romney’s ongoing inability to connect with a cool, young voting populace.

“Gangnam” which prosaically means “South of the River”, refers to Seoul’s nouveau riche neighborhood. It’s a district overrun by a combination of cosmetic surgery clinics (there’s practically one in every building), underground hostess bars (ditto), luxury boutique shops, overpriced espresso joints, and hip-looking restaurants with blasé food. It’s a neighborhood where a 300-class BMW is considered to be a Hyundai, and a Hyundai is considered to be... er... what the rest of Korea can afford to drive. There’s plenty of eye-candy for both genders. But there’s also the sense that intellectual thought and culture run as deep as a melted popsicle on a hot sidewalk.

“Gangnam Style” harpoons the district’s vacuity with the precision of a Japanese whaler, while providing loads of melodic hooks and laughs that make this tune an instant classic. But enough jabbering from me. If you haven’t already, catch the video below, then find out more about it in the well-written article that appeared in The Atlantic (!) magazine last month.

Going Dark for the Summer

Asiaonepercent will be taking a break until mid-August.

Wishing everyone a great several weeks of summer (or winter for you Southies), capturing prosperous moments whenever they may arise.

Want a US$13,000 Beauty Tip?

Waking up one morning and miraculously looking like Amanda Seyfried (above) is about to get a little easier for three women in the world. All it seems to take is a willingness to shell out US$13,213 for a 50 gram jar of high performance night face cream, brought to you by the beauty-minded people at Japan’s Cle de Peau (a brand under Shiseido). It is a limited edition of their La Crème product, to be rolled out in September to commemorate the company’s 30th anniversary. Each of the three jars are designed by French designer Olivier Severe and features 30 layers of crystal topped with three platinum ring. What’s inside the jars that sets the limited edition cream apart from the company’s every-day version of La Crème is still unclear - the company hasn’t said. Perhaps they’ve stumbled on the secret Coca-cola-equivalent formula for achieving permanently supple and smooth facial skin. Or perhaps the crystal bottles are simply filled with liquid gold. Let’s hope that the latter is not true, since the cream costs five times more than gold on a per-gram basis. That would be highway robbery, even for a cosmetic company. The second most expensive face cream currently on the market is Sisley's Sisleya Anti-Aging Concentrate Firming Body Care, priced at a mere $415 per 150 ml pot. Cle de Peau’s forthcoming product is definitely on a different planet. Probably Venus de Milo.

It will be interesting to see whether the three jars to be sold are purchased by Asians or Western women. Given that the three will be on offer in Tokyo, and given Asian women’s obsession with clear, fair, ever-youthful skin, I’m guessing Asian. No other country goes gaga for skin-care products quite like the Japanese and Koreans. The Chinese are not far behind.

Much research has been done on how Asian skin differs from that of Westerners. On the plus side, Asian skin tends to feel and look smoother because of fewer hair follicles. Secondly, it is more age resistant and less prone to wrinkles, since Asians generally have a thicker dermis that contains greater collagen. On the negative side, Asian skin (1) is more prone to irritation since it has a thinner stratum corneum (the outermost layer of skin, according to dermatologist Dr. Anthony Rawlings), (2) scars more easily, for the same reason, (3) tans more readily due to more photo-protective pigment melanin but also produces freckles and sun spots, and (4) can be alternatingly both more oily and drier. For all these reasons, many Asian women consider their skin a desirably advantageous but high-maintenance companion or investment.

But $13,000 for a fancy jar and questionably fancier skin conditioner?? Couldn’t Shiseido come up with anything more beneficial to humankind to mark 30 years of business? Maybe the world will indeed be a better place if three more of us look like Ms. Seyfried. You’ll have to ask the people at Shiseido for confirmation of that opinion.

Details Here

Hong Kong, Put a Lid on This Gini

The South China Morning Post has reported this morning that Hong Kong’s Gini co-efficient (the scale between 0 to 1 that measures wealth inequality, with higher numbers denoting wider gaps) has continued to climb inexorably. In 2011, it reached 0.537, versus 0.533 five years ago, and 0.451 in 1981. Hong Kong’s figure is among the highest in the developed world – Singapore is at 0.482 and the US (which is also considered high) is at 0.469. Any number above 0.50 should set policy alarm bells ringing. More middle-class oriented countries such as Korea, Japan and Western Europe tend to have Gini figures in the high 0.30s or low 0.40s.

To make matters worse, the Census department statistics showed that the median monthly income for the city’s poorest actually dropped over the past five years, from US$290 per month to US$266 per month for the bottom 10%. Meanwhile, the median monthly income for the city’s top 10% during that period rose, from US$9,800 per month to US$12,211.  Given the rise in inflation due to imported fuel costs, exorbitant rents and general commodity prices, the economic hardships facing those in the bottom bracket is almost unimaginable.

The city has over 1 million people (or 14%, according to Oxfam) living in poverty as well as a disproportionately high number of Forbes’ Asian billionaires (38 of them, or 14%). It has the world’s highest retail and residential rents as measured on a per-square-foot basis. It has Rolls Royce dealerships doing business across the street from urban squalor.  It has tax policies that benefit the wealthy – a maximum personal income tax of 15%, no capital gains tax and relatively absent luxury tax. It did not have minimum wage legislation until 2011. These are facts and statistics more associated with third-world countries, not advanced nations.

The Chief Executive-elect CY Leung has highlighted anti-poverty measures as a key focus for his administration. Let’s hope that he’s got real ideas and resolve to create a more sustainable social welfare model, rather than simply a lamp that he rubs to make a wish come true.

Xiyi-ze, Say It Ain’t So, Bo!

I’ve tried to avoid blogging about the Bo Xilai (the senior ranking Chinese government official from Chongqing) affair since it broke early this year. It’s the biggest, juiciest scandal to come out of the Chinese Communist Party for a couple of decades, so the China-related news media has been all over the story like oyster sauce on choi sum vegetables. My thinking has been that there is little for me as a blogger to do than to sit back wearing a raincoat with a large tub of popcorn in hand and watch the seedy story unfold. No doubt, the forthcoming book/movie combo will reaffirm that fact often trumps fiction when it comes to telling incredulous stories.

However, the latest twist involving China’s first lady of film - Zhang Xiyi of Crouching Tiger, Hidden Dragon and numerous other critically acclaimed films - is too juicy and jaw-dropping to sit silently by.  For those who have missed the really relevant news over the past two weeks by burying their heads in such trivial matters as the Euro debt crisis, potential for double-dip recessions and the gyrations of the world’s markets, Zhang Xiyi has sued for libel two Hong Kong newspapers – Apple Daily and Next Magazine – for earlier reporting that she had prostituted herself with Bo Xilai and a select number of senior tycoons over the past ten years. She has since been prohibited by the Chinese government from traveling abroad pending further investigation. As such, she missed attending this year’s Cannes Film Festival and peddling her aptly named next movie Dangerous Liaisons.

So far, this is simply a rumor, and it is unsubstantiated. It’s certainly a fair question to ask why a figure as successful as Zhang Xiyi would be motivated to sell her body for sex. Some have speculated that she may be the victim of a grand scheme by the Chinese government to vilify all its enemies in this year of power transition. Zhang Xiyi has rubbed some officials the wrong way (not literally, presumably), and she may be part of the housecleaning sweep related to Bo Xilai.

But the rumor is a staggering one. Zhang Xiyi has been called the most beautiful Chinese woman of them all. Her face and Gong Li’s are certainly the best known worldwide. So, if she were in fact trading herself for cash and other favors, you can bet that she certainly did not do so cheaply. On the contrary, Apple Daily has reported that she charged in excess of US$1 million per “encounter”, earning over $110 million during that ten year period. That averages out to roughly 10 sessions per year of such tax-free employment. Didn’t Dire Straits sing a song about something like this in their heyday? In any event, that implies some serious money shelled out by some seriously horny cadres for the privilege of her company.

What will the next turn of events in this breathtaking story reveal? That Bo Xilai sleeps with an Arnold Schwarznegger blow-up doll and cross-dresses to make himself appealing in Lady Gaga’s presence? Don’t bet against it!

Details Here

Michael Lewis and the Role of Luck

I can't say enough good things about Michael Lewis. Though he and I are roughly the same age, he has been a banker-turned-writer role model for me. He happens to also live in Berkeley, CA, where I went to university. Books such as Liars Poker, The Blind Side, and Moneyball are intelligently and entertainingly written books that examine activities like banking, American football and baseball from a unique, uncommonly human angle.

 His commencement speech at Princeton University, where he talks about the role of luck in life success, is true to his character and reputation for wit, wisdom and empathy. We are all lucky to have him around to deliver messages like this one.

Fat Cat to Iron Man

I overheard a funny conversation early this morning. One guy was saying to another, “The company is not in a cyclical industry, so therefore, its valuation should be reflected with a higher growth multiple.” His buddy grunted agreement. What made the chat seem funny is that the two of them, like me, were hunched over on expensive carbon fiber bicycles slogging up a long hill out of Shek O in 33c heat. Over the years, I’ve heard many interesting comments made by cyclists on that hill – “Jesus, I wish I hadn’t had that milk tea just now”, “Dude, your shaved calves are looking buff”, “Man, I nailed that swim-bike transition in Phuket last December” – but never two finance guys chatting about a stock investment. That’s serious commitment to one’s career.

In another incident earlier this week, I happened to run into the Asia head of Lazard Capital Markets on an airplane. He was looking very cut and tanned. I asked him why he was looking so fit. His answer - “triathlon”.

When I first moved to Hong Kong 20 years ago, I was considered something of a bohemian and a nutter for taking a spin around the island on my skinny-tired aluminum road bike. That’s not the case anymore. Judging by the number of early-morning cyclists these days out on the narrow Hong Kong roads (and the pissed-off, half-deranged minibus drivers weaving between these brave souls and oncoming traffic), it is clear that triathlons and other thon-suffixed endurance sports such as aquathons, marathons and trail-running ultramarathons are enjoying a huge spurt in popularity. It also has not been lost on me that there has been a massive surge in the number of entrants in the 40-49 age group category in local triathlons and a fast-growing number of 40+ year old professionals participating in events such as the seven-day, 250 km Racing the Planet desert races that are held in exotic and extreme locations around the world such as the Sahara, the Gobi, the Atacama, and Antartica.

So what’s been going on amongst these 21st century “yuppies”? Why the seeming transition from fat cat wannabes to iron men (and women) in training? Especially in an urban environment financial jungle such as Hong Kong, which doesn’t exactly scream ENDURANCE SPORTS MECCA?

The more that I’ve thought about the issue, the more I realize it’s no surprise that people who have been hammering away at making money for close to twenty years and centering their lives around their careers are having second thoughts these days about how they see themselves. Clearly, with bankers worldwide being bashed by public opinion, share prices and bonuses experiencing volatility over the past few years, and Asian economic activity sputtering, other goal-oriented activities that offer serious challenges are bound to have heightened appeal to A-type personalities.

Fairchild Management Group – a US West Coast-based endurance sports promotion agency – puts it well on their website:

Since the early 1970‘s and into the 80‘s running a marathon was the greatest of physical challenges.  For the better part of a decade now, an Ironman Triathlon has been viewed as the pinnacle of the endurance world and certainly remains the worlds hardest one-day event.  It continues to attract the attention of millions, and along with endurance sports in general, is now a truly exploding market among Corporate America.  Endurance sports are considered the fastest growing sport on the planet! Even more than golf and second only to sailing, Triathlon boasts the most affluent and impressive of all demographics with a median income of $167,784 and a higher education level with 86% having a college degree or higher.

These athletes are highly driven, success minded people who dream big, prepare meticulously and continually challenge themselves. Naturally a loyalty develops to the brands that help them achieve their goals, becoming as emotionally connected to the brand itself as the lifestyle itself.  Endurance athletes are the dream client as brand loyalty plays a major role in their life.

Endurance sports, and Triathlon in particular, is a community filled with over-achieving like-minded people who are highly educated, wealthy, and driven to find the next challenge.  They live an active and healthy lifestyle beyond the norm and are willing to do what ever it takes to accomplish those goals.  Not to mention have an enormous purchasing power!

Fairchild is decidedly favorably biased in their view of the demographic of the average triathlete. Nevertheless, the anecdotal evidence from where I sit in the bike saddle is clear – in Asia, triathlon is not cheap, so it requires serious financial commitment or equally serious credit card limits. A decent bike set up (including clothing, helmet, bike computer, titanium aero water bottle cages – you get the picture) can easily cost US$8-10,000. Then there are the multiple pairs of $100 running shoes. All-in-one tri suits can cost US$150+ each, while a wetsuit for cold water events can cost 2-3x that amount. Then, there are the international travel budgets to get to races, necessary because each Asian country does not have more than 2-3 well-organized events a year (although that too is changing). Similar to triathlons, mountaineering or multi-day desert races can also cost a small fortune.

What does all that money invested get you? Surely, lots and lots of sweat and suffering. Endorphin rushes followed by the mid-afternoon energy crash. A trimmer waistline and beefier legs and arms. Premature skin aging. Some bragging rights and claims to moral superiority around the office on Monday mornings. But increasingly, more camraderie and a growing social network around like-minded people who have a bit of money in their pocket, and a few loose marbles in their brains.

A Diamond in the Rough Conditions

Economic conditions are looking rough these days, with the US still trying to scrape out a semblance of a recovery, and the swan-diving fortunes of Greece, Spain and Ireland causing heartburn for the world’s political leaders, bankers and investors. Evidence abounds that China and Hong Kong are succumbing to the stress – economic growth is hitting the skids and asset prices are falling faster than many pundits are comfortable with.

But at least if you are the Martian Pink diamond at a Christie’s Hong Kong jewelry auction, you’re still looking mighty pretty. The 12.04 carat pink stone is the largest round fancy pink diamond in the world. It was named in 1976, the year of its world debut, when the US sent a satellite to Mars. The gem’s color was thought to be similar to that of the planet. Tuesday was the first time in 36 years that it has re-appeared on the world scene.  At the Hong Kong auction, the rock sold for 40% above its pre-auction estimate, at US$17 million. It was the most expensive lot and a bright spot in an auction that went so-so in comparison with recent events in Hong Kong.  A couple of other gems sold for above their estimates – a pair of diamonds which were 10.88 carats each ($4.2 million) and a six carat Burmese ruby ring ($3.3 million).

These premium one-off rarity purchases run counter to recent trends affecting luxury jewelry companies, which are experiencing headwinds after years of sparkling growth from Chinese and emerging market demand. Chow Tai Fook, a Hong Kong/China based jeweler that was the world’s most valuable jewelry chain (it’s not Tiffany, folks) on its initial public offering (IPO) debut in December 2011, has slumped to an all-time low, trading 35% lower than its offering price. Graff Diamonds, an ultra-high end London-based jeweler, has scrapped plans for a US$1 billion IPO in Hong Kong, citing adverse market conditions. No doubt, postponement is the right call. Graff has a highly concentrated and lumpy business profile, with only 20 customers accounting for 50% of its $650 million in revenue. Furthermore, half of the company’s value is embedded in its inventory. It would take investors with a rock-hard faith and constitution to believe that both sales growth and inventory valuation will continue to grow in a global market that has turned to jelly. Lastly, Tiffany’s management has also recently provided warning to public investors of lower sales forecasts, due to softening demand from China and Korea.      

The value of diamonds is based on the illusion of scarcity. It is an illusion created by controlled, rather than actual, supply. And while there will always be a few individuals out there who will pay any price for a scarce luxury such as a Martian Pink diamond, another commodity gaining even greater scarcity these days is investor confidence. And, like gemstones, when fear floods the market, prices are bound to sink. Sometimes, like lead.
 

Superdaddy Dearest

       Li Ka-shing with first son Victor                           Second son Richard


Well, it was bound to happen – Superman is planning retirement. The man being referenced is not a buff-looking dude who wears a leotard, cape and tighty-whitey undies dyed red. It is Li Ka-shing – Asia’s richest man. (Caveat: It’s possible that he may actually dress that way in private, but he has never been publicly caught in the act.) And it’s possible that the business world will be a slightly less-safe place without him in it.

His succession plan features his two sons – Victor and Richard. No surprises there. First-son Victor will get his father’s shares in both Hutchison Whampoa (the industrial conglomerate) and Cheung Kong (the real estate vehicle). Also no surprises there. Victor has been a steady if unspectacular presence in those two listed companies as his father’s lieutenant for many years. It remains to be seen whether he can continue to build the value in the businesses (some would characterize them as a reign of terror over Hong Kong, such are their grips on the city’s commercial activities) that his father achieved, or whether Victor will founder due to a lack of vision, gravitas and/or organization skills.

Second-son Richard is and has always been a more interesting case. Befitting his place in the offspring order, he has been the typically more independent, rebellious sort. Two major hits during the first dot-com era helped him make his own mark on the Asian business world. First was the $950 million sale of the StarTV satellite TV network to Rupert Murdoch in 1995, a deal which netted him a tidy profit on a $125 million investment. No doubt Dad was proud of that trade. He leveraged that cash into his internet holding company - Pacific Century Cyberworks – that took over the staid Hong Kong Telecom in 2000 in a deal that became known as Asia’s version of AOL TimeWarner. The resulting company, PCCW, is still Hong Kong’s leading telecom provider. With the completion of this second deal, Richard resigned his directorship Hutchison Whampoa, also in 2000, since Hutchison was keen on building out a rival mobile network - 3.

Since then, Richard has seemed to spend much of his energy scheming to squeeze out more control in PCCW from minority shareholders, building out the dubiously conceived Cyberport development, giving birth to children out of wedlock as one of Hong Kong’s most eligible bachelors, and generally keeping himself visible in the local news media. Despite the attention that he has garnered since 2000 stepping out from the caped shadows of his father – and even competing against him in several occasions, Richard has struggled to replicate the success that he demonstrated in the previous decade. Shareholder value creation at PCCW has been lackluster. Oh, and he had to correct a public statement that he had received a degree at Stanford University. (Not.)

Nevertheless, succession time is a time to come together as a family and make a public stand. Superdad has said that he will support Richard’s investment activities through the provision of cash in an amount that is “multiple times” the son’s current assets. Niiiiiice. Dad says he is confident that the money will be invested into “traditional long-term” industries that somehow will not conflict with older brother Victor’s interests. It is Dad’s way of saying “Second Son, go forth and multiple” as well as “Don’t screw up by investing into hair-brained schemes that piss off the family.” Time will tell whether Richard takes heed or invests into projects that do little more than produce familial kryptonite.

Details Here