Slinki Malinki attended the funeral of the late Malaysian casino man Lim Goh Tong over the weekend at Genting Highlands on the border of Selangor and Pahang. He was quite moved. He sent some pix and a well-written report of his experience.
The towel with the red ribbon is the traditional cloth they give out to all the funeral guests. This is in addition to the something sweet and something red that are handed out at traditional funerals (red to ward off the bad spirits, and sweet to lift your own spirit). Somebody said that the towel is only handed out for a greatly loved one, someone that you would cry in sorrow on the demise of, and the towel is for you to wipe your tears.
This a photo montage of Lim Goh Tong throughout the years. The Chinese press ran it. The Malay and English press are more sensitive to use pictures of the founder with successive PMs and big shots. But the Chinese press has no problem celebrating just the man himself, and how he has an avuncular look through the years.
The last picture is what truly tugged at my heart strings. The poster speaks for itself. It was a farewell not to a Tan Sri, not to a "founder", but simply to "Uncle Lim". There were many school children and handicapped kids at the funeral procession. I gather that Lim Goh Tong had been a generous benefactor to the needy.
But what I found inspiring was seeing the school children joining in with full respect. I overheard some of them saying how they wished they could get closer to the cortege to pay a proper last respect.
And while walking with the funeral procession, I saw some of the handicapped children struggling with their ungainly strides, when asked by their minders whether they wanted to rest, said they wanted to continue walking.
To me, that was the spirit of Lim Goh Tong fighting the odds living on...
Wednesday, October 31, 2007
Slinki Malinki attended the funeral of the late Malaysian casino man Lim Goh Tong over the weekend at Genting Highlands on the border of Selangor and Pahang. He was quite moved. He sent some pix and a well-written report of his experience.
Tuesday, October 30, 2007
Various reports said more than 10,000 had turned to give a grand farewell to the man, who never received such great adulation when he was still alive. It's quite amazing. He did many things quietly: giving to many charities, lending money to an Indian tribe to build their casino in the US, giving money to his village in China, and sponsoring many other events.
No PR machine could have generated such a massive turnout of people at a funeral. You should also watch this news video by The Star.
Uncle Lim has definitely left behind an unmatched legacy. His highlands resorts, once considered a piped dream, now attracts more visitors than all the tourists to Malaysia every year.
Sunday, October 28, 2007
The limited liberalisation came slightly earlier than expected as the two governments recently signed a pact to exclude the sector from the Competition Act despite the obvious anti-competitive nature of the move. But the opening of the sector will have to take place anyway by next year as part of the Asean open skies pact, as mentioned by Sophie's World earlier.
But will it result in an overnight plunge in the airfare for the sector, which has been monopolised by Singapore Airlines and Malaysia Airlines for the last three decades?
The liberalisation, albeit limited, will definitely put downward pressure on airfare for the Kuala Lumpur-Singapore route.
It won't be difficult for AirAsia of Malaysia and Tiger Airways of Singapore -- the two budget airlines that will start flying the KL-Singapore route in January next year -- to undercut the two national airlines. The two national airlines had fixed the fare for shuttle flights at more than S$300 for a round-trip ticket.
But can the two no-frills players charge airfare that will be substantially cheaper than trains (er, don't bother unless you want to travel at a snail pace) and buses (ranging from S$50 to S$100 for a return ticket)?
Yes, but the cheap airfare may be set aside for a few seats in each flight. What's more important is the fall in the average airfare for the sector, not the headline-grabbing lowest fare for a few early birds.
The latest installment of the Raffles Conversation in The Business Times features another Indonesian-Chinese tycoon. This time, it's Stephen Riady of the Lippo group in Indonesia and Singapore.
The piece, though colourful, is very sketchy about the problems faced by the group during the tumultuous years of the regional financial crisis a decade ago. One also doesn't get a good sense of the size of the family's empire and its long-term strategic business plans.
The devout tycoon
Stephen Riady, president of the Lippo conglomerate, talks to CHOW PENN NEE about why faith and business can mix, the prospects for real estate, and the group's future plans
A HUGE signboard for the Lippo development Newton One at the junction of Newton and Dunearn Road is emblazoned with the words 'Fully Sold, Thanks be to God'.
Stephen Riady, president of Indonesian conglomerate, the Lippo Group, is not afraid to wear his faith on his sleeve. Dotted around the island, his group's projects bear testament to his strong beliefs.
'Our development at Sentosa Cove is expected to have very good response too, when the results come out next month. For that one, I'm going to put up a signboard with the phrase 'Praise be to God', he says with delight, his arms gesturing animatedly.
Unapologetic about his enthusiasm for religion, Mr Riady says this is the best way to show one's faith. 'When you proclaim openly, you signify your commitment to Christianity. I become stronger after saying it and I feel I'm strengthening my faith,' says the 46-year-old Mr Riady. Ironically, he was the last in his family to convert - in 1992 as a 31-year-old - after his siblings and parents had taken the plunge.
Apparently, many staff of the Lippo group are also devout and have been fervently praying for the success of the group's projects. 'In fact, they were the ones who suggested I put a phrase thanking God for the developments being fully taken up,' reveals Mr Riady.
Whether or not through divine intervention, Lippo's prominence in the real estate space in Singapore has been growing. It had started snapping up properties on choice parcels of land long before the property-price frenzy took hold. 'When the Singapore government talked about the plans to remake Singapore, lots of people heard it,' he says. 'But we were the ones who believed in it, and took action early.'
This is the hallmark of a wise investor, he explains. 'If you see something that you believe in, that other people have not seen yet, will you just wait there? No. You get so excited you just go out to the market to find friends and brokers and see if there are opportunities.' Fortunately for him, at that time, there were few bidders and plenty of opportunities.
The group started its buying spree with Lippo's head office at Shenton Way at the end of 2004. It was subsequently sold for more than double the $151 million purchase price at $350 million earlier this year. Mr Riady said signs were becoming clearer in 2005 and 2006 that the Singapore economy was in good shape, with more investors streaming in. Then it was full steam ahead for the group, which chalked up a buy every month.
The Lippo name came to the fore with high profile buys from local banks United Overseas Bank (UOB) and OCBC - which had to divest some of their attractive properties in order to comply with regulatory requirements. 'Those were opportunities of a life-time, they were prime assets,' Mr Riady recalls.
Overseas Union Enterprise (OUE) - bought in a joint venture with Malaysian tycoon Ananda Krishnan from UOB - owns Meritus Mandarin hotel, the office building Overseas Union House, and the adjacent Change Alley Aerial Plaza. Lippo also bought retailer Robinsons from OCBC.
The tally in Singapore so far: nine residential developments, five commercial properties and two retail brands, with a total value of $4 billion. Collectively, these assets are a perfect fit for a group which had decided to focus primarily on real estate and retailing after the 1997 Asian financial crisis hit. Before that, its businesses ran the gamut of telecommunications, manufacturing, banking and other sectors.
Mr Riady - who has just been named Ernst & Young Strategic Investment Entrepreneur of the Year - is not about to slow down. He hopes to increase the value of the group's portfolio from US$7 billion in assets at present to US$20 billion within five years.
He does not think property prices here have reached their peak. 'I think not for the next four to five years,' he predicts. Ever the astute businessman, he's already looking for new opportunities. Right now, he's putting his money on properties that are almost completed.
'The developments that are going to be completed in six months to one year's time, there will be a lot of demand for them,' he says, pointing out that people who have sold their homes in en-bloc sales will need places to stay. There's also a dearth of soon-to-be completed projects.
His plan for his next few developments is to keep a few choice blocks for renting out. 'For the launch of Sentosa Cove next month, the plan is to sell half and then keep the other half and rent out,' he says, pointing to the booming demand for service apartments.
But what about the possible fallout from the US sub-prime mortgage crisis? It doesn't seem to faze him; there's still no problem borrowing from banks here, he says, and liquidity is abundant. 'I think the Asian market fundamentals are still strong, governments have accumulated huge foreign exchange reserves and companies in Asia have healthy balance sheets.'
To him, Asia and the US seem worlds apart. 'When I go to the US, people are talking about sub-prime,' he says. 'But in Asia, Hong Kong, China, Singapore, it's business as usual, people are still looking for opportunities to buy.' While transactions might slow in the next six to nine months, activity will return after that, he predicts.
Mr Riady's other core business, retail, is also humming along nicely. In the latest development, Lippo's Auric Pacific Group bought Delifrance - the chain of bakeries and cafes - from Prudential Asset Management Asia for $75.2 million earlier this month. Mr Riady said Delifrance is a 'good, strong brand' which would fit in with the food businesses Auric currently owns.
'Auric is involved in food manufacturing and distribution, but we would like to go direct into food retailing, straight to the consumers,' he said. Some of Auric's brands include Sunshine bread and SCS butter as well as a 29.9 per cent stake in Sesdaq-listed Food Junction Limited which operates a chain of food courts, Food Junction and Food Culture, in Singapore, Malaysia, Indonesia and China.
Delifrance's network of 230 outlets spanning Asia is a good way for Auric to distribute its other food products which do not have access to other markets outside Singapore, Mr Riady explained. 'We can sell SCS butter to Delifrance outlets in Hong Kong, for example, therefore using these overseas outlets to distribute our other food products,' he said.
In terms of clothing and department stores, his vision for the group's retail business is not just confined to Singapore but takes in the whole region, encompassing Indonesia, Hong Kong, China and Thailand. Growth for his retail business will be both organic and via acquisitions.
In China the group wants to grow organically, under the brand name Robbinz. 'We have started from scratch, with two stores in Guangdong. Two more will be opened in Tianjin and Chengdu, with the Tianjin store spanning one million sq ft - the largest single department store in the whole of China.'
'In the next three to five years, we plan to grow retailing from the present turnover of US$2 billion to US$5 billion for whole group.'
China is an important market for the group, but in the next 30-40 years. 'If we want to become the top businessmen in the world, Singapore is a little small, and we cannot ignore China,' says Mr Riady.
He plans to use Shanghai, rather than Hong Kong, as the base for Lippo's China operations in the future. 'If you want to be serious about the country, we have to be in that place, rather than operate from another territory,' he says.
Meanwhile, closer to home, Mr. Riady is determined to shrug off the bad press arising from the ousting of long-time Robinson directors in November last year.
'That episode was unexpected and I feel regretful over what has happened,' he says. But he is resolute in not letting the saga overshadow his plans for the department store. 'That was in the past. We now have better relationships with the current directors. Time will tell if I'm right or wrong. Let's see the results of Robinsons over the next few years.'
As president of Lippo group, Mr. Riady's ambit spans Singapore (where he is now based) plus Hong Kong and China. His attachment to Singapore goes way back; he studied here from the age of 10. In the years ahead, he sees Singapore becoming increasingly important for the group, which has shifted its head office here from Hong Kong. 'We want to make Singapore the regional office, outside Indonesia,' he says.
'The government here has good and far-sighted vision,' he adds. 'Its plan to remake Singapore into a completely different city is very positive for the market. That gives us a lot of confidence.'
In fact, the group will be raising up to $587.4 million with the planned listing in Singapore of a real estate investment trust (Reit) based on its retail properties in Indonesia. The Lippo-Mapletree Indonesia Retail Trust (LMIR) will offer 645.5 million units at 78 to 91 cents a unit, according to the trust's preliminary prospectus which has been lodged with the Monetary Authority of Singapore earlier this week.
Having made his first million in stock market investing while he was still studying for a finance degree at the University of Southern California, Mr. Riady was already subsumed into the family business - set up by his father Dr Mochtar Riady - two years before graduation.
He has since gone from working in various departments to heading the group's business in Singapore and Hong Kong. His brother James takes charge of the Indonesian business. Given his success, it is surprising to hear him say, not without a tinge of regret, 'actually if I had a choice I would have done something else, be a doctor or engineer'.
'My dad didn't say that I had to join the business, but in the early days, you already have the business, so somehow in university you just naturally major in business. You don't think about it.' Every school holiday would see him go back to Jakarta to work in different departments in the group's banking business.
Mr Riady doesn't want to impose the same routine on his children. 'The next generation, let them go, let them choose what they like,' he says amiably. What about succession? It's too early to say who will take over the business, he replies. For now, he is letting his children pursue what they want. Two of them are studying in his alma mater, while the third is 16 years old and studying at the Singapore American School
'It's important that we tell them they don't have to be in the family business. You see many people follow something that is not in their interest. Halfway through, they say that this is not what they want.' He relates how he meets friends of his children and they ask him for advice on a career 'that gives the most money and fame quickly'. But that may not be where their talents or interests lie, he says. 'It's important that you see what areas you like and can serve best. If you can serve it well, then the money will follow.'
Mr Riady's Christian faith has helped inspire his philanthropy. Like most businessmen, making money, friends, entertainment, were top of the list. 'Even family was ranked number 3 or 4, so God was nowhere on this list,' he says. That changed 15 years ago.
Joy of giving
'I have become less self-centred since becoming a Christian. The joy and satisfaction is much greater when you give. He relates his first act of giving, when he was still working in Hong Kong, where he attended a camp organised by a Christian organisation to help recovering drug addicts. 'They only asked for US$3,000 from me, and of course I helped. There was no unwillingness or burden at all on my part, since it was only US$3,000.'
A few months later, they invited him to their Christmas party, and the people who attended the camp were all wearing new T-shirts. 'A few hundred people were able to wear new T-shirts because of my gift. I had never experienced that before.'
Today, the Lippo group gives to a variety of causes, particularly education and religion.
It donated $21 million to NUS Business School in the form of $15 million to support the Mochtar Riady Building, and $6 million to create two distinguished professorships. The group gives to various churches and schools in Indonesia, Hong Kong, China, and Vietnam. 'We set aside millions each year,' he says proudly. 'And every year it is increasing.
Wednesday, October 24, 2007
This a lovely snapshot of the life and achievements of the late Lim Goh Tong, who built a built a mountain-top casino resort in Malaysia and a sprawling empire from scratch more than 40 years ago. All the pix came from The Star, which has a gallery and a video as a tribute to the tycoon who died yesterday.
He started building the casino and the resort when he was already in his 50s.
Goh Tong and old friend, former Malaysian Prime Minister Dr Mahathir Mohamad. They probably had mutual admiration for each other.
Genting is one of the biggest, if not the biggest, taxpayers in Malaysia. Last year, Genting dished out more than RM500 million in corporate income tax. This does not include all the other gaming duties paid by gaming arm Resorts World. Genting earned nearly RM2.8 billion in pre-tax profit last year on the back of revenue of nearly RM7 billion.
A 1969 photograph showing Goh Tong briefing the late Tunku Abdul Rahman, who was Malaysia's first PM, on the plans for Genting Highlands Resort.
Genting has announced that it will close its casino and theme parks for 12 hours on Monday as a mark respect to its founder. Read more news reports on the funeral.
RIP: Lim Goh Tong (1918-2007)
Tuesday, October 23, 2007
Legendary Malaysian businessman Lim Goh Tong, 90, passed away today. The founder of the Genting empire will always be known in history as the man who secured the sole casino licence in predominantly Muslim Malaysia in the 1960s. It's definitely no easy feat for him to retain the license in a country that has becomingly increasingly Islamic. No new casino or gaming license will ever be issued again in the country as Islam forbids gambling.
Oddly, the late Chinese tycoon celebrated his birthday this year. Although he didn't have formal education, he was quite spiritual. He was the founder of the Chin Swee Temple (pix from the Genting website) near the more famous casino at Genting Highlands.
Goh Tong had turned Genting into a global name, with the help of his second son Kok Thay and other family members. They will continue to make Genting a bigger gaming company in the world.
Unfortunately, he won't be around to witness the next big thing -- the group's S$5-billion bet to build an integrated resort with casino called Resorts World at Sentosa in Singapore by 2010 or 2011. It will be one of Singapore's first two casinos following the lifting of a 40-year ban.
The Singapore project could even eclipse the Malaysian casino one day.
Below is an abridged profile of the late casino tycoon by Bloomberg. Additional reading and viewing -- The Star coverage, New Straits Times, The Genting Story, The Lim family of Genting and other news reports.
By Stephanie Phang
Oct. 23 (Bloomberg) -- Lim Goh Tong, who built a hilltop casino in Malaysia and turned it into Asia's biggest publicly traded gaming company, died today. He was 90.
The founder of Kuala Lumpur-based Genting Bhd. and Malaysia's third-richest person, died peacefully after a short illness, his grandson, Justin Leong, said by phone.
Lim, who started out selling vegetable seeds in China, built Malaysia's only licensed casino, risking his life and facing bankruptcy along the way. He created what is now Malaysia's eighth-largest listed company, with interests in gaming, hotels and cruise lines from the U.K. to Hong Kong.
The Genting group is constructing Singapore's second gaming resort and includes Resorts World Bhd., which operates the casino in Malaysia. The combined stock market value of the assets, including interests in oil palm plantations and property, surpasses $22 billion, according to the company.
Lim was born in the mountainous Anxi county in China's Fujian province. He was named after the parasol tree, considered auspicious among Chinese, by his maternal grandfather, who hoped the name would bring him good fortune, Lim said in his 2004 autobiography. Forbes in May put his wealth at $4.3 billion.
Lim, who didn't speak English and had no knowledge of engineering, also ventured into mining and construction. His experience "and a little layman common sense'' helped him succeed, he wrote in his autobiography.
Enjoying the cool mountain air of a hill station while working on a hydroelectric project in 1963, Lim came up with the idea of building a hilltop resort nearer to Malaysia's capital of Kuala Lumpur. The plan stunned friends and fellow contractors, who warned Lim, then 45 and a successful businessman, against it.
"The Genting project basically fitted my idea of an ideal business,'' Lim wrote. "No one was interested in it, which meant no competition. I took the plunge against all odds and held on steadfastly.''
He spent seven years developing Genting, laying a road and building a hotel on a 1,800-meter (5,900-foot) hill outside the city. Failing to lure others to join, Lim invested all his money in the project without getting any returns in the seven years it took to build.
"At one stage, I was teetering on the brink of bankruptcy,'' he wrote.
During construction, Lim almost lost his life at least six times from falling trees, driving mishaps and a landslide, according to his autobiography.
Genting, which means "atop the clouds'' in Mandarin, is a complex of hotels, themed casinos, amusement parks, shops and restaurants. The resort attracts more than 18 million visitors a year.
Lim married Lee Kim Hua in 1944. They had three daughters, three sons and 19 grandchildren, according to his biography. His second son, Lim Kok Thay, is Genting's chief executive officer.
Kok Thay succeeded his father as president and CEO in 2002, before becoming chairman in December 2003. Genting needed to become a "global corporation,'' Kok Thay said when he replaced his father as chairman in 2003.
Sunday, October 21, 2007
Well, it shouldn't come as a surprise that Uncle Sam has started intervening in the political affairs of Myanmar, as suggested by Sophie's World earlier.
According to Singapore's The Straits Times today, the United States has stepped up pressure on Myanmar's military regime, with President George W. Bush imposing new sanctions and signalling that more could follow.
Mr Bush on Friday issued orders intended to secure the release of political prisoners in Myanmar and force the junta to open negotiations with the opposition. He ordered the Treasury Department to freeze the US assets of 11 senior junta members.
President Bush also issued an executive order expanding the sanctions to those who assist the blacklisted officials, starting with 12 individuals and entities. Three companies either based or linked to Singapore - Pavo Trading, Air Bagan Holdings and Htoo Wood Products - were among those blacklisted, reported Agence France-Presse.
The newspaper quoted an academic as saying that the targeted sanction works better than sweeping restrictions and brought North Korea to the negotiating table.
The US has definitely done the right thing to force the dumb generals to the negotiating table. But it's sad that the bully is now seen to be doing the right thing, while other parties such as Asean and the United Nations have been crippled by relative inertia.
It's sad that China, which is a backer of Myanmar, has failed to secure the moral victory by forcing Myanmar's military government to do the right thing instead of killing its own people.
Instead, President Bush the war criminal, who ordered the unprovoked invasion of Iraq that resulted in the death of 650,000 Iraqis, is now seen as the hero.
Former Malaysian Prime Minister Dr Mahathir Mohamad (ST pix) has finally been discharged from hospital following his protracted recovery from his second heart bypass seven weeks ago.
An AP report cited the hospital as saying that Dr Mahathir, 82, is expected to continue with physiotherapy exercises at home and return to the institute for routine checkups.
The news report said a November heart attack forced Dr Mahathir to halt his one-man campaign against Prime Minister Abdullah Ahmad Badawi, whom he picked to succeed him when he retired in 2003 after 22 years in power. Dr Mahathir has accused Mr Abdullah of nepotism and mismanaging the economy. Mr Abdullah rejects the charges.
Sophie's World doesn't think Dr Mahathir will resume his campaign so soon to resolve the bridge issue and the unfulfilled gentlemen's agreement with Badawi.
Dr Mahathir needs to take it easy for some time even if his enemies continue to snipe at him. And Dr Mahathir should not waste time with someone like Khairy Jamaluddin, the son-in-law of Badawi.
Incidentally, the profile of Khairy in Singapore's Today this weekend is way too sycophantic. The article paints such a positive picture of the young man as if he's a PM candidate.
The political star in Malaysia has always been the visionary Dr Mahathir, not a young and ambitious upstart with many faces like Khairy.
Dr M's daughter Marina Mahathir takes a dig at Khairy.
Wednesday, October 17, 2007
The message is clear but the poll findings inconclusive.
According to an online survey by Sophie's World, there is consensus to the question on whether Asean should kick out Myanmar following the recent atrocities by its military government.
11 people or 73% said yes, as it's about time to alienate murderers.
3 people or 11 % said no, as it's better to engage the government as a transition to democracy.
1 person or 6% said maybe, as it's better to be pragmatic about it.
Well, the sample size is just too small with only 15 respondents during the one-week poll to make a big statement out of the survey. :-(
But Sophie remains resolute in her desire to see the demise of the Myanmar murderers.
Saturday, October 13, 2007
The Raffles Conversation in BT on Hong Kong property executive Justin Chiu is well written and colourful, showing the man's innovative marketing side.
But Justin is definitely not in the same league as his big boss Li Ka-shing, whom I think has never been featured in the Raffles Conversation column. I hope to read Raffles Conversation on Li Ka-shing one day and other top personalities in Singapore and elsewhere.
Property's rock star
Cheung Kong Holdings' Justin Chiu talks to ARTHUR SIM about revealing his wild side in the marketing of the Hong Kong conglomerate's property developments
MILD-MANNERED businessman by day, and the property-trade equivalent of a rock star by night, Justin Chiu has single-handedly made property launches glamorous affairs in Hong Kong, and some say in Singapore too, attracting the paparazzi frenzy usually reserved for movie stars.
For his elaborate efforts that go towards creating memorable events with each launch, Mr Chiu - an executive director of Li Ka-shing's Hong Kong conglomerate Cheung Kong Holdings and head of its property arm - is affectionately known in Hong Kong as 'The man with a 100 faces'.
In a recent incarnation, he dressed as an Arab sheikh to launch one Hong Kong development, simply because, 'everyone was saying that Middle East investors were coming'. (Units went for $5,300 per square foot, by the way.)
In Singapore, he has at various times led a bevy of beauties while dressed as James Bond and a convoy of Harleys in Easy Rider costume, all in the name of creative marketing.
Amazingly, Mr Chiu, 57, has only been in marketing and property development for 10 years with Cheung Kong. Before this, there was a four-year stint at Sino Land, and 15 years at Hang Lung Development Co. At these jobs, he was responsible for retail and commercial leasing as well as property management.
So when did he discover his wild side?
Mr Chiu joined Cheung Kong in 1997 and started doing sales and marketing in 2000. It was not the best of times for the property market and he knew he had to create buzz for an upcoming launch or there would be the real possibility that no one would come.
'I thought what we needed at the time was a spokesperson, or a movie star ... a sort of icon,' he recalls.
Celebrity endorsements are not a new concept, especially in Hong Kong. One only has to think of the many products that Jackie Chan has put his name to.
Mr Chiu, on the other hand, decided to create his own spokesman, and initially he had intended the position for his manager of the sales team. 'We were launching a seafront development at the time so I told my manager to come dressed as a naval commander.' Understandably, his manager refused.
Leading by example
So like any good boss, he decided to lead by example, and get into character himself. 'Anything is better than seeing another old man in tie,' he says.
The response, from the press at least, was unprecedented. And Mr Chiu's launch event occupied the covers of the property pages in the local media. A star was born.
'What we did was a great way of soft selling. People don't read ads but they do read the news. We also saved money on advertising, and we didn't need to pay for movie stars.'
Mr Chiu's instincts about marketing a product were right, a feat made more impressive by the fact that his educational background is founded on staid degrees in sociology and economics. But as he understands: 'What you study at university does not always relate to what you do for living.'
So far this year, Cheung Kong has earned up to HK$14.6 billion (S$2.8 billion) from the sale of 4,200 residential units. The turnover was more than double that for the same period last year and has already achieved the company's full-year sales target.
Selling property these days is a lot easier.
And Mr Chiu also does not really need to get dressed up any more, but he still does. 'The Hong Kong people have come to expect my 'special image' and reporters even want to know what I will be wearing next,' he says.
Now, Mr Chiu gets recognised in the streets. And overseas too.
He recalls how once, at the Changi International Airport, his Singapore staff was led to him by a small commotion from tourists shouting: 'Hey it's the Cheung Kong guy!'
Another time in a Chinese restaurant in New York, the waiter recognised him from the Chinese tabloids and Mr Chiu was seated immediately.
The going has not always been easy though, even for Easy Rider.
Cheung Kong's residential forays into the Singapore market began back in 1996 with acquisition by Li Ka-shing of a site in Thomson Road for $130 million. A year later, Cheung Kong bought an East Coast site for the then astronomical sum of about $680 million, 30 per cent higher than the next highest bid. The two purchases came just before the Asian financial crisis.
The developments came under considerable media scrutiny, not least because everyone wanted to know how Li Ka-shing, Asia's richest and shrewdest businessman, would get out of this one.
The task of moving units in a stagnant market fell on Justin Chiu and Cheung Kong's Singapore property arm, Property Enterprises Development. Mr Chiu got creative.
For starters, he devised an incentive scheme for the 390-unit Thomson project - Thomson 800 - something that had not been done before.
Under its Guaranteed Appreciation Plan, Cheung Kong was prepared to offer buyers a 10 per cent capital appreciation in about five years for units at Thomson 800 as well as protecting buyers against price falls of up to 10 per cent. If the valuation increased by less than 10 per cent above the purchase price, the developer would pay buyers the difference.
In essence, it was a kind of discount but unlike other developers who were offering outright money-off, this sounded more like a value-add. Clever.
The Asian financial crisis and its repercussions sent all property markets in the region into a tailspin. Only about half the units of Thomson 800 were sold, with City Developments finally buying the remaining units in 1999.
For the East Coast development - Costa del Sol - the situation was more dire because there were 906 units to move. Even the help of the bikers on Harley Davidsons could not stir the market, and only a third of the development was sold.
Amazingly, Cheung Kong went on to buy another site, this time in Cairnhill for $370 million, and again the property market dived with the aftermath of the terrorist attacks in the US on 11 September 2001.
The 248-unit Cairnhill Crest was launched in 2004 and Mr Chiu remembers how selling 40 units - after putting on an extravagant launch party with him dressed as James Bond - was quite an achievement at the time.
But even then, Mr Chiu did something that was not often done here, and that was to go direct to his buyers by flying them in from Hong Kong and China.
Following his own advice
Today, properties do frequently sell out within weeks. But then, who can predict property cycles? And how important are they? Mr Chiu says: 'Whether the market is good or bad, developers must buy land.'
Fortunately, he heeded his own advice.
In 2001, Cheung Kong, together with joint venture partners Keppel Land and Hong Kong Land clinched a site in Singapore's New Downtown at Marina Bay for $462 million. Many sniggered behind their backs. 'At the time, everybody was saying that it was too risky,' remembers Mr Chiu.
But we all know what happened. The economy turned and the office building, One Raffles Quay (ORQ), went on to become one of the most talked about developments of the time, with all the big financial institutions clamouring to get in.
In July this year, Cheung Kong and Keppel Land each sold one-third stakes in ORQ to their sponsored real estate investment trusts (Reit), Suntec Reit and K-Reit, for $941.5 million each. Incidentally, Mr Chiu is also chairman of ARA Asset Management, which manages Suntec Reit.
In 2005, the same consortium won a tender for a commercial mega-site at Marina Bay to become major stakeholders in Singapore's new growth story.
Both ORQ and the newly dubbed Marina Bay Financial Centre have gone on to register 'over 100 per cent profit margin' for Cheung Kong. Indeed, as Mr Chiu reveals, 'all our projects in Singapore made money', although profit margins for the residential developments were considerably slimmer. For Cairnhill Crest, this was about 10-12 per cent.
On a philosophical note, Mr Chiu says: 'You cannot be winning all the time.'
But because Cheung Kong has very, very deep pockets, it can afford to hold off selling units, such as those at Costa del Sol and Cairnhill Crest, until the property cycle swings up again. The last block of Costa del Sol was sold in August for about $200 million, or $820 psf.
But this is only slightly higher than the launch price in 2000 and you do not need to be an expert to know that property prices are still rising.
Perhaps this is the real lesson here. All developers know that having the resources to hold on to property until prices pick up is the key to survival. Only a certain kind of developer believes that making a killing isn't everything - even when dressed up as 007.
Standing out from the crowd
STEREOTYPES are fun. Especially if you are not the object of derision.
Wisely then, Hong Konger Justin Chiu refused to be drawn into the age-old discussion on why Singapore is just so different from Hong Kong. He would not say, for instance, if he agreed with the popular stereotype that Singapore is clinical and boring.
Or, for that matter, if Singaporeans lack verve and an entrepreneurial spirit.
He was, however, game to talk about 'Hongkies'. 'The competition in Hong Kong is very stiff. So if you want to be noticed, you really have to stand out,' says Mr Chiu, by way of explaining why Hong Kong people are perceived as show-offs, and why it has more Rolls Royces per capita than any other country in the world.
It probably also explains why according to this writer's own Louis Vuitton Index, Hong Kong ranks above Paris, New York, Beijing and Singapore, with a total of six stores.
Mr Chiu, an executive director of Hong Kong conglomerate Cheung Kong Holdings, knows a thing or two about standing out from the crowd. The eleventh child in a family of 14, he decided that getting a university degree was going to be his thing. 'During my time, getting a university degree was a big deal,' he says.
His beginnings, although not exactly humble, were not entirely privileged either. His father, he recalls, had only two wives. 'Most people had four,' he says, quite seriously.
His first degree was in sociology. Then realising that he needed something more practical, he took a second degree in economics at Trent University in Canada.
He cut his teeth in the real estate industry at Hang Lung Development Co in 1979 - still one of Hong Kong's larger property developers. But by 1994, finding that the pace of business had slowed too much for him, he decided to move on. 'I am actually quite aggressive,' he reveals.
So he joined Sino Land instead, the Hong Kong property arm of Singapore's richest man, Ng Teng Fong. Compared with the other Hong Kong developers, Sino Land was a relatively young company that had to prove itself, so it suited Mr Chiu for the three years that he was there.
'Sino Land had to be very aggressive in the market, especially in bidding for development sites at government land tenders because unlike older companies, it did not have the same contacts,' explains Mr Chiu.
Ng Teng Fong was not hands-on in the daily operations of Sino Land, leaving that to his son Robert. Still, the occasional meetings with the tycoon left him with a strong impression. 'If Singapore had more Ng Teng Fongs, it would be a lot more successful,' he says.
Mr Chiu, the father of two children in their twenties, is not impressed by the many young people he has met lately. 'Many just want stable jobs in government agencies or investment banks,' he notes. 'And in Singapore, if you can get a job in the civil service, the pay is actually quite attractive,' he added.
Mr Chiu does not think Hong Kong people are, like himself, 'aggressive'. He is of Shanghainese stock after all. Still, he does believe that Hong Kongers are more adventurous. 'They are prepared to take higher risks,' he says.
'Which is why,' he adds, 'reits (real estate investment trusts) are not very popular in Hong Kong. Hong Kong people think reits are boring. There is no capital appreciation. Singaporeans, however, like reits because it offers a stable income.'
This says a lot actually.
Mr Chiu is also the chairman of Cheung Kong's ARA Asset Management which manages Fortune Reit, which counts as its assets Hong Kong shopping malls. The reit, together with its Suntec Reit, were listed on the SGX mainboard and not the Hong Kong exchange.
So why does a man as dynamic as Justin Chiu - a man who rides a motorbike for his speed fix, skis, and until recently, para-glides - choose to work for not one but two of Asia's most dynastic companies?
Cheung Kong, Mr Chiu says, 'is very big'. The property arm alone has a 150 million sq ft landbank in China's first and second tier cities alone.
Mr Chiu also remembers being very impressed by Asia's richest man.
He was interviewed by Li Ka-shing personally for his job at Cheung Kong, and after the interview, Mr Li told him that the organisation values integrity above all. 'He also told me not to promise people anything that I don't think I can deliver,' recalls Mr Chiu.
On Mr Li's part, he also shows his subordinate mutual respect. 'I have been given a free hand to try new ideas,' Mr Chiu says, adding that Mr Li junior, Victor, is also very supportive.
And to his credit, the senior Li is always willing to listen. 'He would listen to you first and comment only when you are done. He never interrupted you. It really shows respect,' says Mr Chiu, laying to rest another stereotype.
Friday, October 12, 2007
What a joke!!!
Former US Vice President Al Gore (ST pix) has jointly clinched the 2007 Nobel Peace Prize.
I have no problem with the joint winner -- Chairman of the United Nations Intergovernmental Panel on Climate Change, Rajendra K Pachauri.
But what's so special about Gore's re-invented public persona in the area of environmental protection? So many organisations have been working hard to prevent any further deterioration of the environment.
I can appreciate past winners like the great Bangladeshi economist Muhammad Yunus, who spearheaded the revolution to lend to the poor through his Grameen Bank. He's also a humble gentleman. I'm moved by his selfless and noble act to help the poor.
I also hope the Nobel Peace Prize will be given to someone who can broker the peace in the Middle East and Myanmar, or at least kick out the dumb generals in a noble way.
But the Nobel Prize must never be tarred again. The prize should never be given to an ill-mannered person like Gore.
Wednesday, October 10, 2007
Such strong language is absolutely necessary as Singapore has assumed the chair of Asean, a grouping of Southeast Asian nations including the rogue state of Myanmar. The army's action of killing monks and protesters recently cannot be tolerated any more, although Asean has had a policy of non-interference in the affairs of member nations.
Kuan Yew should have added that he would have made the Myanmar generals stand against the wall and give them ten of the best.
"Dumb" Myanmar generals cannot last indefinitely MM
MINISTER Mentor Lee Kuan Yew believes Myanmar's ruling generals, who, he described as being rather 'dumb' when it comes to managing the country's economy, will not be able to survive indefinitely.
But he says the army must be part of the solution to the problems facing their country, because if it is dissolved, all of Myanmar's administrative instruments will go with it and the country will have nothing with which to govern itself.
Mr Lee made these points during a wide-ranging interview at his office in the Istana on Sept 27 with syndicated columnist Tom Plate of the University of California Los Angeles Media Centre and new-media expert Jeffrey Cole of the University of Southern California Annenberg Centre.
Mr Lee said: 'These are rather dumb generals when it comes to the economy... How they can so mismanage the economy and reach this stage when the country has so many natural resources?'
He noted that Singapore hoteliers, who had sunk millions of dollars in Myanmar on his advice, have now found their hotels empty.
Mr Lee disclosed that he has tried to advise the generals and take Myanmar out of its isolation, referring specifically to former junta member Khin Nyunt, who is now under house arrest.
MM Lee said: 'He's the most intelligent of the lot. I sold him the idea, or at least he bought the idea, that the way for them to go forward was to get out of uniform and do it like Suharto, form a party, Golkar and then take over as a civilian party.
'But halfway through, Suharto fell. So, it ended up as the wrong advice, they back-tracked. Then they chucked Khin Nyunt out.'
Tuesday, October 09, 2007
The business community is still abuzz over the sudden departure of another CEO of a major Singapore company. Han Cheng Fong (ST pix) quit Fraser & Neave in a huff last week. This came shortly after the surprise resignation of DBS Bank CEO Jackson Tai last month.
F&N cited his differences with the board of the beverage and property company.
Many other reasons have been mentioned for his departure, including Dr Han's purported differences with outgoing chairman Michael Fam and the entry of Lee Hsien Yang in the boardroom.
But one should not discount the Temasek connection in Singapore.
Maybe, all roads lead to Temasek in Singapore.
Monday, October 08, 2007
Ready for the same old story?
According to a report, Malaysia's national railway company Keretapi Tanah Melayu (or loosely translated as Malay Land Railways or Malayan Railways in English) has been steadily making improvements that are starting to show up on its bottomline despite the tough operating environment.
The report said the rail operator managed to narrow its unavoidable losses by close to 21% last year from RM131 million in 2005 on account of efforts to increase revenue, reduce expenditure and improve efficiency.
That's definitely not my impression. I have not noticed any marked improvement in its efficiency. See earlier postings.
Train services in Malaysia continue to be behind time and the service below par. Grandma uses the train quite often for her travel from KL to see me in Singapore. She takes the train because she's not familiar with the bus service, which is also more expensive for senior citizens.
Mom and dad will always discount the train arrival time by about one hour. They will still be in time to pick grandma up after the 7-8 hour journey. Cars and buses take only 4 hours to cover the 320-km distance between Singapore and KL. A bullet train service will cut down travel time to just 90 minutes between the capitals of the two countries but the plan remains a piped dream.
Planes take less than one hour but Malaysia and Singapore still won't open up the route to budget airlines. The sector continues to be dominated by the national carriers of the two countries. And the two governments recently signed a pact to exclude the sector from the Competition Act despite the obvious anti-competitive nature of the move.
This is despite the fact that the Asean Free Skies pact is set to kick in by next year. Nevertheless, Singapore will continue to push for complete open skies with Malaysia and within Asean.
In the meantime, grandma will have to put up with the slow Malaysian train service, which was first introduced by the British more than 100 years ago.
Yipee!!! Former Malaysian prime minister Dr Mahathir Mohamad is finally out of the intensive care unit following his second heart bypass some one month ago. You can see latest pix at his daughter Marina's blog.
Latest hospital statement sent via Dr M's press secretary Sufi Yusoff:
Institut Jantung Negara, 8 October....YABhg Tun Dr Mahathir bin Mohamad has been transferred to the Bunga Raya ward of Institut Jantung Negara from the Intensive Care Unit at noon today.
IJN doctors are happy with his progress and will continue with post-surgery rehabilitation including chest and muscle strengthening exercises. Tun Dr Mahathir has also been able to walk unaided since yesterday.
In order to give him adequate rest in between physiotherapy sessions, visitations continue to be limited to immediate family members.
Monday, October 01, 2007
Former Malaysian Prime Minister Dr Mahathir Mohamad may still be in hospital following his second heart bypass, but it doesn't stop him from giving the OK for the opening of his bakery business in Kuala Lumpur.
Sufi Yusoff, his press secretary, sent a flyer to bloggers today on the opening of The Loaf @ Pavilion tomorrow. The high-end bakery business is a joint venture between Dr Mahathir and his Japanese partner. Sufi urged everyone to attend the opening.
Meanwhile, Singapore's Today newspaper has dedicated a long article to Dr Mahathir and Marina Mahathir's blog about her father's current condition.
The article is generally fair and balanced. But I also feel that some parts are not quite justified.
For example, the writer Pauline Loh said that Marina's blog has become a "hugely successful public relations scoreboard for her father, known for his scathing criticism of the current leaders, an attitude sometimes interpreted as a reluctance to let go the reins he had held for 22 years."
For the record, Dr Mahathir stepped down willingly in 2003 and declined to hang on to any government portfolio. He kept his silence for two years before he started criticising the Badawi administration for certain policy decisions.
And no, I don't think Dr Mahathir has any intention to cling on to power. It is not wrong for him to be upset over changes that effectively unravel his legacy. I'm quite sure there was a gentleman's agreement between Badawi and his former boss to carry out his legacy as part of the handover exercise.
The writer also said that "the elder statesman is now seen as a grandfatherly figure among Malaysians, who humour his crankiness and scathing tongue, and in fact seem to miss his decisive bluntness."
I don't think many Malaysians simply humour his 'crankiness'. Throughout his two decades in power, I think Dr Mahathir had 'taught' many Malaysians to speak up through his no-holds-barred attitude towards many bigger political figures. He wasn't afraid to criticise even the United States when it's justified. One example is Dr Mahathir's criticism of the US invasion of Iraq.
He gave many Malaysians pride. I also believe that Dr Mahathir is the ultimate nationalist. I couldn't help thinking that Dr Mahathir must have picked his surgery date to be after the National Day celebration on Aug 31, so that he won't miss all the festivities.
According to the well-written The Star article and pix, no one suspected his impending surgery especially given the way he enjoyed himself at the 50th Merdeka parade, then just two days from his date with his heart surgeons. I believe no doctor would have said no if he had wanted to schedule his surgery early due to the urgency of the matter.
Anyway, please go to the opening of Dr M's bakery if you happen to be in KL tomorrow. I'm quite sure this will help bring a smile to Dr M, and help him rise to the occasion. :-)