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

Adjunct: Contemporary Art – Inclusive or Exclusive?

The following article serves as an adjunct to my May 19 article discussing whether contemporary art is inclusive of the mass population or exclusive to the 1%. I was heartened to read about the developing trend among some of Asia’s ultra-wealthy to spend some of their money on building art galleries to display their collections to the public. Some critics may contend that these art galleries are simply snobbier derivatives of Bentleys, yachts and mansions or vanity projects that stretch in attempts to convey good taste. However, tycoons are presumably not soon going to be offering rides in their limos or yachts for $5 a piece anytime soon, or turn their palatial living rooms into coffee shops. Art galleries, on the other hand, are a way of sharing, irrespective of the motivation to having them built. Spreading culture is a form of philanthropy, and there is little reason not to applaud the effort.

A new generation of wealthy Asians build their own art museums to display collections they've amassed

Indonesian-Chinese farming tycoon Budi Tek poses in front of a painting by Gerhard Richter during an auction preview in Hong Kong. Tek is set to open the De Museum in Shanghai next year featuring Asian and Western contemporary art, after opening his first in Indonesia's capital Jakarta in 2008. While Asia's new generation of wealthy are usually better known for splashing out on extravagant toys such as private jets, mega-sized yachts and supercars, some instead have built big art collections and now aspire to showcase their refined sensibility to a wider audience. AP Photo/Vincent Yu.

By: Kelvin Chan, AP Business Writer

HONG KONG (AP).- Over the past two years Wang Wei and her husband Liu Yiqian dropped a reported $317 million on their hobby. Now they need somewhere to display the collection they've amassed. The solution: a private art museum that Wang hopes will impart some class to China's flashy nouveau riche.

Wang and billionaire investor Liu are part of a new generation of wealthy Asians that is better known for splashing out on extravagant toys such as private jets, mega-sized yachts and supercars. Some, instead, have built big art collections and now aspire to showcase their refined sensibility to a wider audience.

More Details Here

MAKING A KILLING IN A BEAR MARKET

Nice kitty, particularly if mounted. (Source: www.52safari.com website)

Much as wealthy Westerners have done for many decades, rich Mainland Chinese guys have been increasingly turning to trophy hunting to burn off a few extra testosterones and have something cool to show for it. And outfits such as 52safari International  Hunting Club (run by an American based in Beijing) have been satisfying those whims while providing many of the creature comforts that well-heeled Chinese desire. Let’s face it, many of these Asian businessmen’s idea of” roughing it in the wild” is stepping into a par-five sand trap on a misty day. So luxury matters.

A ten-day black bear-hunting trip to Canada costs approximately US$ 12,500. Features of such a get-up-close-to-nature-and-kill-it expedition can include the following:

•    Hunting permits for anything from rabbit to antelope to lion
•    A luxury coach to get around
•    A DVD documenting the client’s exploits
•    A Chinese chef to cook any edible game that is killed. Given that a truly red-blooded Chinese patriot’s appetite doesn’t exclude very much, the chef is presumably kept quite busy
•    Provisions for a non-hunting wife, girlfriend or mistress, for half-price
•    Add-on features such as a bear skin rug (unclear how freshly killed the bear is…), for another $5,500.

There have been known to be polar bear hunts for US$80,000. But these have stirred controversy, even in environmentally-apathetic China. So let’s pray that wealthy Chinese don’t acquire the same taste for polar bear fir products as they have for snakeskin handbags. 

Contemporary Art – Exclusive or Inclusive? Discuss.

Is it your opinion that “Contemporary Art Excludes the 99 Percent”? This question was the topic of debate at a sold-out event at this year’s Hong Kong International Art Fair. The Fair represents 266 galleries from 38 countries, and is the largest forum of its kind in Asia. The discussion (hosted by a debate-event organization called Intelligence Squared) featured four distinguished artists and art critics split on two sides of the issue of whether contemporary art is increasingly aimed at rich people at the expense of the teeming masses yearning to be inspired (or puzzled).

Let’s set aside the fact that tickets to this event cost almost US$40 per person to attend. That’s not cheap. In the modern media world, US$40 buys a lot of entertainment – 40 song downloads on iTunes, 4 movies with vertigo-inducing 3-D glasses, 3 1/2 music CDs for those not tech-savvy enough to find free pirated downloads, and an infinite number of free e-books. So, anyone willing to pay US$40 to participate in a live discussion forum on the snobbery of modern art defines themselves, don’t you think? And sure enough, the room was filled with men in suits and women in designer dresses. The gift bags for each guest included sample bottles of Aesop’s Gentle Scalp Cleansing Shampoo and Revitalising Hair Sealing Conditioner, and an expensive-looking guide to a New York art gallery.

Before the debate began, the polled audience was fairly evenly split in responding “yay” or “nay” to the topic question, with 20% taking the undecided “Hmm” view. I initially took the undecided position. The debate comprised 10 minute speeches by each of the four panelists, followed by Q&A from the audience.

Ben Lewis – a film maker and art critic who defended the “Yay” side to the question – talked about how a “utopian dream world of art” had been undermined by a “harsh reality.” The social system of today’s art world “embodies” the exclusion of others, and exudes a “We’ve got the lolli” attitude. His talk, though a bit erudite, nevertheless hit some strong tonal notes.

Joseph Kosuth – an artist who took the opposite “Nay” view – discussed how art has grown to eclipse both science and philosophy – perhaps even religion - as the dominant participatory medium of expression and faith. He argued that the art market needs to be differentiated from art itself and its history. In his view, the market is like business and politics – they are short term phenomena. Art defines culture in the longer term perspective.

Paul Chan – a New York-based artist on the “Yay” side of the fence – gave an eloquent speech that was both personal and ethereal. He talked about how the act of exclusion can make the familiar into something foreign. Art is defined socially, in his view, and it is now “luxurious.” Case in point – “I was flown here from New York – business class, something that hasn’t happened to me in, like, 600 years.” 99% of the people don’t have time to include art in their lives - they are too busy with simple day-to-day existence. He then concluded with a very thought-provoking tangent – Truly great art excludes 100% of the people. Greatness feels “other-worldly," and is new and unfamiliar to just about everyone, regardless of who owns it or where it is viewed. Paul was brilliant.

Elizabeth Ann Macgregor – a museum director arguing the “Nay” perspective – took a very reasoned, measured approach. She said that, too often, it is not the art but the context for displaying art – i.e. the galleries - that create exclusionary bias. Galleries have always had a vested interest in keeping art exclusive, since that scarcity drives up prices. Initially, public display spaces perpetuated that stand-offish snobbery by showing art in hushed white-walled rooms. But public art spaces are changing to be more inclusive and accessible to a broader audience.

An entertaining Q&A session followed the speeches and covered the difference between contemporary art and popular culture (A: art is for producing ideas, pop culture is the consumption of ideas), whether art should be sold on an exchange and whether art reality shows were a good or bad thing (A: neither, just boring).

The audience poll at the end of the evening yielded an interesting result – those who voted for “yay, contemporary art does exclude the 99%” won by a 2:1 margin over the “nays.” Perhaps it was the politically-correct vote. Perhaps it was Paul Chan’s charm. Or perhaps people simply looked around the room, took stock of who was attending, and had self-reflective, know-thyself moments.

As for me, I voted with the “nays.” Like many people, I am not happy to see the top end pricing of every market being driven sky-high by increasing wealth and wealth disparity. It is not heartening to see more and more of the world’s treasures being held by a privileged few. But I am also a realist, and I believe in capitalism as the least-worst foundation for material interaction between human beings. All ideas, other than a utopian few such as universal love and world peace, have a price. Generally, the greater the idea, the more value it has. If someone wants to own a particular idea and is willing to pay a fair price for it, then it should be their right, so long as they don’t abuse that right. And if high prices motivate some artists to create more pieces, then where is the loss in that? Contemporary art at its best is about fresh ideas that challenge convention and spur other ideas. That makes it a very powerful medium. Luckily, contemporary art has a certain transparency, particularly in the age of the internet and high resolution mobile devices. If a Picasso or Damien Hirst piece sells for $80 million, then worldwide attention is called to it and images of it are easily called up for viewing, for free. Or very often, pieces like it show up in public galleries or art shows that are accessible to the general public. A person does not need to be in the same room as an original piece of art to be inspired or moved by it. Great art transcends its context. The only great shame is if art is hidden away and not available for access at all.

Such is my opinion, at least. That being rendered, I will shut down my lap top and let you get on with your day. Thanks very much for reading. Now, is anyone available to help me untie my cravat?


 

China’s MFA – Masters in Fraud Administration

Want to be Part of Asia’s 1% Without Deserving to Be?

Fraud School - Enroll Now!

Learn How to:

Maintain Two Sets of Financial Books!

Manipulate Accounting Guidelines!

Forge Tax Receipts!

Our Comprehensive Services Include:

Furnishing Lists of Bogus Suppliers and Customers to Impress Would-be Investors

Renting Out Inventory, Labor and Trucks to Make Your Fake Business Seem Oh-so-Real

Providing Snappy Answers (e.g. “We OEM!”) to Tough Investor Questions such as “How Do You Generate Such Impressive Revenue from Such Small Plant Capacity?”

Call Now for a Free Consultation – 1-800-RIP-OFFS

Chinese Nationals Only, Please

The attached investigative report, though dense and dry, sheds light on consultancy businesses in China and Hong Kong that advise unscrupulous business owners on how to systematically defraud international investors. Such Fraud School operators include investment firms such as Chief Capital in Hong Kong.

The fever that raged among North American investors for most of the past decade to invest into Chinese businesses has cooled significantly in the past year as investors in publicly listed companies (e.g. Toronto-listed Sino-Forest and NASDAQ-listed ChinaCast Education, Fushi Copperweld, and Lihua International) have fallen victim to scams and a wide assortment of unethical business practices. International-listed Chinese companies are supposed to represent the crème-de-la-crème class of mainland businesses, since they purportedly need to pass muster with a battery of international accountants, lawyers and investment bankers and meet stringent international listing requirements. Sadly, too many such businesses are not so sweet and creamy after all, and the nice white foam simply hides murky, muddy currents beneath it. And, if the “best” class of Chinese companies is this spotty, what does it say about the rest of Chinese businesses?

Tim Clissold’s riveting book Mr. China about doing business in China in the 1980s chronicles some jaw-dropping cases of horrifying business practices. Clearly, not enough has changed in thirty years. The rule of law is still applied unevenly, if at all. And too many Chinese business operators see each transaction as a merciless zero-sum game, rather than an opportunity to build long-lasting commercial relationships.  

Given China’s economic importance, international investors will continue to beat the well-trodden path to the country’s doorstep, seeking riches. They are well-advised to come provisioned with a large helping of caveat emptor and a well-versed education in anti-fraud practices.

Fraud School

My-home-raja

What rises 27 stories above Mumbai but is dwelled in by only six residents? What single-family-dwelling has a six-floor garage, an auto-repair shop, beauty parlor, restaurants and three helipads and needs 600 staffers to look after? What would the Taj Mahal look like if it were re-designed for the set of Blade Runner? What modern building combines both quintessential Indian cultural elements of palatial grandeur and spiritual asceticism like no other? If you answered “Mukesh and Nita Ambani’s Antilia”, then you could be the next winner on Slumdog’s “Who Wants to be a Millionaire?” This private home of India’s richest man (and wife) was first brought to the attention of the global media when the New York Times profiled it in October 2011, and asked whether the family actually lived in it given its potentially bad “Vastu Shastra” (a geomancy philosophy similar to Chinese feng shui) characteristics. This month’s issue of Vanity Fair (an excerpt is provided through the link below) updates the story and provides a few stunning pictures. In a word, the place looks quite “wow”.

Estimates on how much Antilia cost to build vary wildly. Representatives of Reliance Industries (the Mukesh Ambani's conglomerate) say $50 million (yeah, right), and media sources cite as high as $2 billion (equally implausible). Forbes magazine refers to Antilla as the world’s first $1 billion home. Whatever the real number, few observers would disagree that it is the most expensive private residence (Buckingham Palace is public) in the world.

No one can justifyingly fault the Ambanis for wanting to live in a palace. As the world’s 19th richest person and with a net worth of c. $27 billion, Mukesh Ambani is entitled to claim his share of luxury. He certainly would not be the first ultra-rich dude to indulge in a living space that God himself would have a tough time furnishing. Still, this property is dogged with its share of controversy. Much of critics’ qualms focus on its height, and therefore, visibility. If you were to lay the structure on its side and surround it with trees and a tall stone wall and iron gate, fewer people would feel like the place is a glittering poke in the collective eye. However, as it is, the structure can be seen from miles around, too often reminding Mumbai residents how puny their lives are in comparison.

As referenced earlier, it is natural to compare Antilia with that other Indian monument to spousal love – the Taj Mahal. Antilia is very much identified with wife Nita Ambani, who is widely respected for her wits and philanthropic efforts as well as her beauty. Antilia was designed and built largely at her direction rather than her husband’s. But how long the comparison between the two buildings survives remains to be seen. History has borne out the enduring legacy of Shah Jahan and the most beautiful tomb in the world. Reliance Industries’ story is still being written, and India’s economic revival has a ways to go before proving permanent. One Mughal emperor’s history is sealed in marble. Time has yet to determine whether the more contemporary mogul (bad pun intended) emperor’s influence will be as lasting.

Read the full Vanity Fair article in the June 2012 issue.

Speed Shopping, er Dating, in Hong Kong

The speed dating event above was scheduled to take place at the posh Mandarin Hotel in Hong Kong yesterday. Following a public uproar against the two-fer stereotyping (racial and sexist) that this event managed to cause, the Mandarin withdrew the availability of its venue at the last minute, forcing the organizers to find an alternative venue. Dinner with Foreigners is clearly a misnomer. Not too many HK women, particularly white collar professionals, will pay over US$600 to meet men (who, incidentally, attended free-of-charge) from Indonesia, Korea, Vietnam, India, Egypt or Kenya. Dinner with Wealthy White Dudes would have been a more accurate, if less PC, title for the event. Why did women get charged $600 to attend? To signal their serious interest in long term relationships rather than passing flings. Of course, how that pricing policy prevents horny scumbag men interested in passing flings from getting a free swanky meal and a free chat-up session with Asian girls is beyond me. Maybe the organizers just know high quality gentlemen with noble intentions when signing them up as members...

The event was hosted by the same folks who organize Dinner with Millionaires and Dinner with Flight Attendants. No joke, the latter event is pitched at men who are “CEOs, Bankers, Lawyer, Doctors.” Is that HK Speed Dating’s idea of a marriage made in heaven? Maybe. Regardless, it’s certainly their idea of an inspired social concept that allows highly successful men to chit-chat with well-groomed women who know how to activate oxygen masks and an inflatable slide, while eating decent food that is not served on fold out trays (presumably).

But getting back on topic with Dinner with Wealthy White Dudes, Hong Kong has long been a fertile ground for interracial coupling, particularly of the white male–Asian female sort. Let me first say that I have no fundamental problem with such pairings. I am in an interracial marriage, as are many of my close friends. However, interracial coupling in Hong Kong has been a subject of much discussion and conjecture among Hong Kong observers over my past twenty years living here. During that time, there have been several reasons that have been put forth to explain the phenomenon’s prevalence. Some of them follow below (don’t shoot me for them; I am just your humble reporter).

-     Love is blind. So is money.

-     Expatriate men have large housing allowances and decent-sized apartments (with equally generous closet space) that permit breathing room for young women away from cramped spaces stuffed with relatives.

-     White men don’t generally have the baggage of demanding parents, unlike Asian men. Asian in-laws are often thought of in the same vein as hell’s hounds.

-     When visits with expat men’s relatives are necessary, it means a trip to North America or Europe, rather than a noisy dim sum restaurant in Causeway Bay or Kowloon.

-     Expat men are worldly, and therefore, interesting. They speak cool European languages. Asian men are very wrapped up in making money and then spending it on golf and boy’s toys.

-     Western men have been emasculated by the burned-bra free-wheeling feminism of western women. So white men know to behave nicely to women. (Author’s note: any executive who has made a request to a New York-based personal assistant definitely learns how to ask politely and say “please”.)

-     Hollywood. Enough said.

In any event, I hope that the female participants in the sold-out event above found what they paid a pretty penny for. If the fawning girl in the advertisement is any indication, and the object of her desire fulfills that promise, we may all be blessed with a tighter, more loving, global mixed-blood village. Let’s just hope that pandering to stereotypes isn’t the way to get there.