Li Ka Shing
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{{Infobox Celebrity | name = Li Ka Shing | image = likashing01.jpg | caption = | birth_date = July 29, 1928 | birth_place = Chaozhou, Guangdong | death_date = | death_place = | occupation = Chairman, Cheung Kong Holdings | salary = N/A | networth = Template:Profit $18.8 billion USD (2005)<ref name=networth>Net worth: from Forbes: The World's Billionaires, dated March 9, 2006.</ref> | spouse = Chong Yuet Ming | website = [1] | footnotes = }}
Li Ka-Shing (李嘉誠 pinyin: Lǐ Jiāchéng, Jyutping: Lei5 Gaa1-sing4, born July 29, 1928), is the wealthiest person in Hong Kong and East Asia. According to Forbes Magazine He is also the richest person of Chinese descent in the world. Presently, he is the Chairman of Cheung Kong Holdings.
A Harvard Business School article summarizes Li's career viz: "From his humble beginnings in China as a teacher’s son, a refugee, and later as a salesman, Li provides a lesson in integrity and adaptability. Through hard work, and a reputation for remaining true to his internal moral compass, he was able to build a business empire that includes: banking, construction, real estate, plastics, cellular phones, satellite television, cement production, retail outlets (pharmacies and supermarkets), hotels, domestic transportation (sky train), airports, electric power, steel production, ports, and shipping."
Considered one of the most powerful figures in Asia, Li was named "Asia's Most Powerful Man" by Asiaweek in 2000. On March 9, 2006, Forbes ranked him as 10th richest man in the world at US$18.8 billion. In spite of his wealth, Li has a reputation for leading a no-frills lifestyle, and is known to wear cheap shoes and plastic watches.
Li is also a noted philanthropist; his 1981 donations resulted in the founding of Shantou University, near his hometown of Chaozhou. After the 2004 Indian Ocean Earthquake disaster, he reportedly pledged a total of US$3 million. In 2005, Li announced a HK$1 billion (US$128 million) donation to the University of Hong Kong, which provoked controversy over the public status of the university.
The Li Ka-Shing Library at the Singapore Management University is also named in his honor after a US$11.5 million donation to the higher education institution.
For many years, Li was also a member of the boards of directors of the China International Trust and Investment Corporation (CITIC). CITIC is China's largest conglomerate and is 42 percent owned by the government of China. It serves as the chief investment arm of China's central government and holds ministry status on the Chinese State Council.
Li is often referred to as "Superman" in Hong Kong because of his business prowess. His peers in Hong Kong include Lee Shau Kee of the Henderson Land Development, New World's Cheng Yu-tung, Kwok family of Sun Hung Kai Properties, Henry Fok Ying-tung, among others.
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Li's beginnings
Li Ka-shing was born in Chaozhou in the Guangdong Province, China in 1928. In 1940 the Li family fled to Hong Kong as the Japanese invaded China. Li's family stayed at the home of his wealthy uncle. The arrogance of Li's uncle and immense wealth ignited Li's determination to make a place for himself in the world. Not able to find work on his own, the young Li reluctantly accepted his first job selling watches at his uncle's store, Li's intensity and intelligence soon made him the best salesman in the shop at age 17, and general manager at age 19. Soon after, Li jumped to another company to sell metal wares door to door. He worked 16 hour days: during the day, he would visit customers and close deals; at night he would be at the factory, following up on orders and learning the manufacturing business. His commission paycheck as a salesman is said to be seven times the amount the second best salesman took home. Li, determined to do business with the powerful British, found a private tutor to teach him English every night.
Li's businesses
Li's businesses are dominant in every facet of life in Hong Kong, from electricity to telecom, from real estate to retail, from shipping to the Internet. It is often said that for every dollar spent in Hong Kong, 5 cents goes into the pocket of Li Ka-shing. The Cheung Kong Group's market capitalization is HK$766 billion ($100 billion USD) [as of 30-SEP-2005] (This includes double counting - eg. Cheung Keung has a market cap of HKD 195 billion [as on 15-Jan-06] and Hutchison Whampoa has a market cap of HKD 338 billion [as of 15-Jan-06] but actually HKD 170 billion of Cheung Keung market cap would have been due to its holding of 49.9% of Hutchison Whampoa Ltd. ). The Group operates in 51 countries and employs over 210,000 staff worldwide.
Plastics
In 1949, after learning how to operate a plant, Li founded a plastics manufacturing company in Hong Kong with funds borrowed from family and friends and contacts he cultivated as top-tier salesman. Always anxious to strengthen his company's position, Li read trade publications and business news religiously. Li noticed the growing wealth of the west and decided to supply the world with high quality plastic flowers at bargain prices. Li visited Europe to learn the sophisticated technique of mixing colour with plastics that resemble real flowers. After retooling his shop and hiring the best technicians he could find, he prepared for weeks for the plant visit of a large foreign buyer. Impressed with the quality of Li's plant, the buyer placed a large order. A few years later, Li grew to be the largest supplier of plastic flowers in Asia and made a fortune selling them. Later on, when people ask him if he considered himself lucky, Li's response was "No, I wasn't lucky. I worked hard to achieve the goals I set for myself."
Real estate
In 1958, unable to renew the lease for his company, Li was forced to purchase and develop a site himself. Li was diligent in bidding for land, always making calculations to ensure his profit would be satisfactory and not get carried away by the heat of the moment. Li has a saying that "buying land is not like buying antique, it is not the only deal available." His big break came during the 1960s. When the 1967 riots inspired by the Cultural Revolution on the Mainland were in full swing, many fled Hong Kong. As a result, property prices plummeted. Li, believing that the political crisis would be temporary, and that property prices would eventually rise after that, started buying good parcels of land at rock-bottom prices. By 1971, Li officially named his real estate development company Cheung Kong (長江實業有限公司), named after Cheung Kong, (Chang Jiang or the Yangtze River) the longest river in China. The name of Li's company signals his ambition and his belief that big river grows out of millions of small rivers. To the Chinese, river equals water and water equals money.
A goal Li announced when establishing Cheung Kong was to become bigger and more profitable than Jardine Matheson in real estate development. Jardine was founded in 1832 by two Scottish merchants William Jardine and James Matheson. They profited greatly by selling opium to local Chinese, which they sourced cheaply from Bengal and sold at exorbitant prices. The excess cash was used to buy land, construct offices and warehouses, deal drug, export tea and operate as a shipping insurance agent. In 1872, Jardines withdrew from the opium trade and diversified into sugar refining, textiles, property development and tramways. By going legitimate, the company became the biggest landlord in the territory's Central business district and transformed the barren island (Hong Kong) into a major international business center.
Despite its size, Jardines decided in the 1980s to protect itself from hostile takeover by Li or other outside investors. The company implemented a cross-shareholding structure that was designed to place control in the hands of Britain's Keswick family despite their less than 10% holdings in the group. In 1984, the company also moved its legal domicile from Hong Kong to the British colony of Bermuda in anticipation of the return of Hong Kong to China in 1997. A few years after declaring his goals, Cheung Kong raced ahead of Jardines and won the highly coveted prize of developing a plot of Central.
Ports and electricity
In 1979, Li closed a unique transaction and acquired his current flagship company Hutchison Whampoa Limited from one of today's largest banks HSBC. The purchase created a massive conglomerate with business interests in multiple industries. The most notable branch of his business is the investment in container port facilities around the world, including in Hong Kong, China, Rotterdam, Panama, Bahamas and many developing countries. All in all, his business controls 12% of all container port capacity in the world.
In 1985, after several rebuffs on the price, Li took just 17 hours to buy a controlling stake in Hongkong Electric Holdings Limited for HK$2.9 billion ($375 million USD).
Retail
A subsidiary of Hutchison Whampoa, the A.S. Watson Group is a leading retail operator with over 6,800 stores. Its portfolio encompasses health & beauty specialist Watson's Your Personal Store, PARKnSHOP supermarkets, Great Food Hall, TASTE food galleria, Gourmet boutique style fine food hall, Fortress electrical appliance stores, Watson’s Wine Cellars and Nuance-Watson airport duty free shops. ASW is also a major producer and distributor of water products and beverages in the region with Watsons Water the top selling brand in Hong Kong.
3G
He also has extensive investments in telecommunications (especially in 3G) in many countries in the Asia-Pacific and Europe, including Australia, Hong Kong, India, Israel, UK, Netherlands, Norway, Italy and Germany, etc.
Asset trader
Hutchison Whampoa group has the reputation of being an astute asset trader. It frequently builds up a new business and then sell it off. Huge profits were obtained in the sale of the interest in Orange and Mannersmann Group in 2001.
Pyramid structure
Like many Asian conglomerates, the Li Ka-shing group is structured to retain disproportionate control without incurring the cost of owning an equivalent economic interest. This separation between control and interest is accomplished through pyramid structure, dual-class equities and cross-holdings. For comparison, American companies such as Google also use a dual-class structure to give its founders and insiders 10 votes for each class-B share while the general public are offered class-A shares with 1 vote each. This may mean insiders with class-B shares can vote to pay themselves rich stock options while the general public will foot the bill as its opinion cannot effect change.
Despite the disproportionate power this control of the ownership structure grants him, Li Ka-Shing has demonstrated a pattern of respect for other shareholders. He has avoided the many abuses companies and conglomerates have committed against lesser corporate stock owners in Hong Kong.
Other Li facts
Although some of his corporation's business deals have been labelled controversial, especially those involving the People's Liberation Army of China (which has extensive industrial holdings), Li's conglomerate is now one of the largest in Hong Kong.
Li's outsized economic and political influence on Hong Kong explains a common saying among residents that can be translated as "Hong Kong is the private kingdom of Li Ka Shing".
His two sons Victor Li (李澤鉅) and Richard Li (李澤楷) are also major players in the Hong Kong business scene. Victor Li works directly with his father as managing director and deputy chairman of Cheung Kong (Holdings) Limited, while Richard Li is the head of Pacific Century Cyber Works, the largest telecom company in Hong Kong. They are both Canadian citizens. One of the most notable business acts by Victor Li was his deal to acquire majority shareholding of Air Canada, the largest and national airline of Canada in 2004 while the airline was under bankruptcy protection. The deal fell through after the labor unions of the airline refused to negotiate regarding their pension.
Besides business through his flagship companies Cheung Kong Holdings and Hutchison Whampoa, he also personally has extensively invested in real estate in Singapore and Canada. He was the single largest shareholder of Canadian Imperial Bank of Commerce (CIBC), the third largest bank in Canada until the sale of his share in 2005 (with all proceedings donated, see below). He is also the majority shareholder of a major energy company, Husky Energy, based in Alberta, Canada.
In January 2005, Li announced plans to sell his CDN$1.2 billion stake in the Canadian Imperial Bank of Commerce, with all proceeds going to the Li Ka Shing Foundation in Hong Kong and the Toronto-based Li Ka Shing (Canada) Foundation. [2]
Incidents and rumours
- Victor Li (李澤鉅) was kidnapped by the gangster Cheung Chi Keung in 1996. Ransom was set at HK$1 billion. Several unconfirmed reports said that the Central government advised Li's family not to report the case to the Hong Kong Police. Cheung later fled to the Chinese mainland, where he was immediately arrested, accused of other crimes and executed in Guangzhou. Commentary at the time made much of the fact that he would "only" have faced a life sentence had he been arrested in Hong Kong.
- The death of Li's wife (莊月明) is often spoken of as a "mystery". Although officially dying of disease, some, most notably Hong Kong's bestselling Next Magazine, have suggested suicide related to Li's private life.
References
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See also
External links
- Cheung Kong Holdings Limited
- Hutchison Whampoa Limited
- Li Ka Shing Foundation - founded by Li Ka Shing, dedicated to funding education and medical care.
- World's Most Powerful Men
- New Ruler of the Information Superhighwayfr:Li Ka-shing