Families owning businesses can prepare as much as they like for a smooth transition to the next generation, but sometimes it just goes very wrong. In the case of one of Taiwan’s biggest food importers Mayfull Food Corporation it went spectacularly wrong.
Shortly after the death of Mayfull’s founder Huang Jung-tu last year a meeting took place between his five sons on how to proceed with the business. At that meeting one son took out a gun shot two of his brothers dead and then turned the gun on himself, and committed suicide. Not a good outcome.
OK, this represents an extreme case of where succession goes horribly wrong. But fraught successions among Asian-based Chinese-owned businesses could be a more common occurrence in the years ahead. There’s two reasons behind this: one is cultural, and the other is timing.
The cultural one is linked to the Chinese concept of equal inheritance, whereby tradition dictates that inheritance is split equally among siblings, or at least male siblings. Equal inheritance can often lead to disputes, particularly when families don’t adhere to it.
Although there’s no direct evidence to prove it, the dispute over Mayfull might have had something to do with this, because the killer son, Huang Ming-te, was, it appears, increasingly being sidelined by his four other brothers. He may have felt that his family weren’t honouring the tradition of equal inheritance. Of course, other reasons, like Huang Ming-te’s metal state, might have played a bigger role in his crazy actions. We will never know for certain.
But sibling disputes over the control of companies among Chinese-businesses dynasties are relatively common – albeit rarely as extreme as the Mayfull case. Earlier this year, a dispute arose for the control of one of Taiwan’s biggest family-owned businesses, the Evergreen Group, after its founder Chang Yung-fa died. Again sons were involved. A feud between Walter Kwok and his two other brothers Raymond and Thomas for the control of Hong Kong’s biggest property group in terms of revenue, Sun Hung Kai, arose around eight years ago.
The other factor – timing – is all to do with the number of big successions likely to happen within the next 10 to 20 years in the region. That’s because many of Hong Kong and Taiwan’s business dynasties were set up after World World Two by entrepreneurs who are now reaching the end of their line. Many of these imminent successions will be handled well with no suggestion of conflicts over equal inheritance affecting the transition to the next generation. But some may throw up problems linked to equal inheritance. Here’s a selection of a few.
Li Ka Shing
Now in his late 80s, Asia’s richest man Li Ka Shing says his eldest son Vincent will take over the business when he dies. So far, Li has handled any concerns over his succession professionally and Vincent appears to get on well with his younger brother Richard, who has been given parts of the business empire and is proven himself a capable entrepreneur. But it remains to be seen if that unity can be maintained after their father, nicknamed “superman”, dies.
Lee Shau Kee
Also in his late 80s, Hong Kong-based billionaire Lee has five children, including eldest son Peter Lee Ka-kit, who is vice-chairman of Henderson Land Development, one of his father’s companies. But younger brother Martin Lee Ka-shing is also vice chairman of the same company. Let’s hope all the siblings can be kept happy when Lee eventually dies.
Now 90, Cheng made his fortune through his New World property company in the 1970s, but these days it is jewellery chain Chow Tai Fook that is the money spinner for the billionaire. He has four children and his grandchildren are actively involved in the business. There’s obviously enough money to go around for the family members, but will that satisfy all the parties when Cheng dies?
The granddaddy of Hong Kong family business dynasties is the 94 year-old Stanley Ho. Still alive and active, and with 17 children and many more grandchildren, when Stanley does eventually go his huge gambling empire might come under some pressure in terms of who owns what. He has passed much of his business interests over to two children, Pansy and Lawrence Ho. Let’s hope they can maintain a smooth transition when Stanley dies.