Chinese refugees streamed into the British Colony of Hong Kong by the thousands in 1940, fleeing the havoc of internal revolution and a three-year-old war with Japan. Among those seeking a chance for a fresh start was the Li family from Chiu Chow in Guangdong province in southern China. But just two years later the father of the family, a teacher, died, leaving 13year-old Li Ka-shing to care for his mother and younger brother and sister. He found a job with a company manu-
facturing plastic toys and watchbands and soon rose to the position of junior salesman. At just 19 he was general manager, and by 23, even while supporting his family, he had managed to save about $2,000. Just a decade after arriving in Hong Kong, Li used those savings to finance his own plastics manufacturing business in 1950—and what has since become a multibilliondollar business empire was born.
Now 59, the phenomenally wealthy Li Ka-shing oversees a broad range of pri-
vate and public companies, making it difficult to obtain an accurate account of his worth. His original business has evolved into his flagship company, Cheung Kong (Holdings) Ltd. Mainly a property developer, it has direct and indirect holdings in such huge companies as Hutchison Whampoa Ltd., Hongkong Electric Holdings Ltd. and Green Island Cement Co. Ltd., which in turn have interests that include shipping, energy, communications, retailing and construction. Together they had a profit of $752 million before extraordinary items and after taxes in 1986 alone.
Ambitions: Hong Kong’s economy is booming, but it cannot sustain Li’s expansionist ambitions —particularly with the 1997 deadline looming for the colony’s return to Chinese rule. In recent years Li has become one of the main forces in the movement of Hong Kong capital into other parts of the world. In Li’s case, as with many other wealthy Hong Kong businessmen, Canada is the haven of choice. He is deputy chairman of the giant Hongkong & Shanghai Banking Corp., which has operations in Canada, and he owns such diverse Canadian assets as the Harbour Castle Hilton Hotel in Toronto and Husky Oil Ltd. of Calgary. Next, he told Maclean's, he intends to increase his investment in “the Canadian property market” and his holdings in two areas that he says are critical to human survival: energy and food. To that end, he said, he plans to purchase a second major Canadian energy firm—rumored to be Turbo Resources Inc. of Calgary— and possibly a major Canadian grocery store chain.
Eager: Li’s rise from near poverty to fantastic wealth has created a complex individual. A top Hong Kong investment broker who knows him well said that the billionaire attempts to hide from publicity and yet he yearns for it. The broker, who asked not to be named, said that when Li’s aides learned that he was bothered by the lack of recognition in Canadian business circles, they spoke with Husky officials. When Li arrived in May to sign the $484-million purchase deal, the Husky executives had organized a huge and lavish reception for him.
Still, Li’s aides try to shelter him from media attention, answering requests for interviews with printed remarks purportedly from Li. But when a
Canadian reporter spotted Li at Hong Kong airport recently and approached him, the billionaire magnate proved to be friendly and eager to talk. Indeed, he offered the reporter a ride downtown in his maroon Rolls Royce, during which he spoke openly about his interest in Canada. “Today my companies control 20 per cent of the Hong Kong Stock Exchange,” he explained. “I cannot invest more here, so we will have more investment in Canada, no doubt.” Li also has extensive holdings in Britain, the United States and elsewhere. But he said that he found Canada particularly attractive because it is “a young country. I think it has tremendous potential for growth.”
Li said that he had made enough money to retire on by the time he was 35. “But I enjoy business,” he added, “so I continue to work.” One Canadian who knows Li,
Calgary oilman Robert Blair, who helped to arrange the Husky purchase, says that he is a builder. “He wants to
create new companies,” said Blair, whose NOVA Corp. owns 43 per cent of Husky. Still, Li’s associates say that he allows his trusted managers to make their own decisions. His response to bright ideas, said Hutchison Whampoa managing director Simon Murray, is often: “It is wonderful. You go ahead with it.”
Regrets: The demands of business allow Li little time for leisure. He plays 18 holes of golf about once a month, he says, but adds with a grin that he is not very good at it. He does not flaunt his enormous wealth. He often wears dark suits and a simple Seiko watch, and although he occasionally uses the Rolls Royce, he is usually driven around Hong Kong in a less ostentatious Mercedes Benz. He has lived in the same seaside mansion with his wife, Amy, for more than 20 years. And now he is training their two sons, Victor, 23, and Richard, 21, to run his business.
Li managed to get the
equivalent of a high-school education, but he clearly regrets not having been able to go further. “Education is the most important thing,” he said, while boasting that both his sons have attended Stanford University in California. Li also spent $500 million building a university in his home province of Guandong. Said Li, who taught himself to read and write English: “You can build a person, a family and a future with education.” Exploded: Li attributes his success to his attention to an important commodity in crowded Hong Kong: housing. He started buying real estate in the 1960s through his holding company Cheung Kong, which he took public in 1972. He used the cash from that first stock offering to buy vast land holdings during a rare slump in the usually red-hot Hong Kong property market. When that market exploded again between 1978 and 1981, Cheung Kong’s undervalued land purchases paid off and profits increased more than tenfold from $4.4 million to $46 million.
Disarray: But it was in 1979 that Li made the move that put him in a league with the richest men in the world. One of the colony’s founding companies, or “hongs,” Hutchison Whampoa, was in financial disarray. As part of a rescue plan launched by Hutchison’s primary backer, the Hongkong & Shanghai Banking Corp., Li bought 22.8 per cent of Hutchison and took effective control. And for the first time, one of the colony’s original trading companies had been taken over by a Chinese businessman.
Li not only saved Hutchison with his corporate coup but propelled it past such fabled British-controlled hongs as Jardine Matheson Holdings Ltd., which has many interests, including engineering and construction, Hong Kong Land, a real estate development firm, and Swire Pacific Ltd., operators of Cathay Pacific Airlines. In 1986 alone, Hutchison began construction on a Hong Kong container port worth $338 million and bought control of Hongkong Electric, the utility that supplies Hong Kong Island’s 5.5 million residents with light and power. As well, it pressed on with its expansion plans in North America and Britain.
Li said that his corporate links to Canada go back almost 20 years to Vancouver, where he purchased his
first piece of Canadian real estate. But his involvement in Canada has escalated rapidly recently, and his flagship property in Canada is now Toronto’s Harbour Castle Hilton Hotel, which he bought in 1981. He has also been deeply involved with the Canadian Imperial Bank of Commerce (CIBC) since 1974 when they jointly formed the venture capital company Canadian Eastern Finance Ltd. More recently he and the bank created CEF Capital Ltd., a merchant banking operation in Hong Kong.
Li’s presence in Canada’s financial sector increased last November when his Hongkong & Shanghai Banking Corp. purchased the failing Bank of British Columbia for $64 million. The small regional bank had failed to recover from a loss of customer confidence following the bankruptcies of two Alberta banks in 1985. Li’s rescue garnered him $2.6 billion in bank assets and 41 bank branches located primarily in Western Canada. Since the purchase, the Hongkong Bank of Canada, as it is now called, has sought an opening to expand eastward.
But it was the surprise acquisition of Husky Oil last December that drew attention to Li’s aggressive expansion into Canada and marked the emergence of Victor Li as a force in the Canadian energy business. Under the terms of the $484-million deal, Union Faith Ltd., Li’s Calgary-based investment and holding company, acquired 43 per cent of Husky. Then Victor, who only recently became a Canadian citizen, purchased an additional nine per cent through a separate company, giving the Li family control of the firm without raising concerns about foreign ownership in the energy sector.
Mainland China is also attracting Li’s attention as he looks beyond Hong Kong. Through his various holdings he owns hotels and a cement company there and is now in a joint venture to build a huge power project in China’s Jiangsu province. But conducting business with China, which is chronically short of foreign currency, is difficult, and Li said that as a result, he has to pursue business interests elsewhere— such as Canada. At the same time, Li insists that he is not moving capital abroad because of nervousness over China’s takeover of the 145-year-old colony in 1997. On the contrary, he said that he expects China will leave the colony intact for 50 years, as it has promised. Declared Li: “Hong Kong can be successful in China.” Still, he said, until China’s economy grows, his two sons will concentrate their energies on a more promising area for growth— Canada.
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