Hong Kong’s highest profile officials and business people on Thursday paid their respects to one of Asia’s richest men, Cheng Yu-tung, whose passing marked the first of an aging generation of tycoons whose hold on the city’s economy faces growing challenges.
Cheng, who died aged 91 on September 29, was the billionaire founder of Hong Kong property group New World Development . His $17 billion empire included one of the world’s largest jewellery companies and spanned the infrastructure and telecommunications sectors, while his business dealings at one point included current U.S. presidential candidate Donald Trump.
Among Cheng’s pallbearers on Thursday were Hong Kong and Macau’s top leaders, Leung Chun-ying and Fernando Chui, Beijing’s top official in Hong Kong, Zhang Xiaoming, and local billionaires Li Ka-shing of Cheung Kong Holdings and Hutchison, and Lee Shau-kee of Henderson Land Development.
Well wishers had draped flowers for 200 meters leading to the entrance of the funeral home, while scores of press waited outside during the service.
Cheng’s death comes as many of Hong Kong’s established billionaire families struggle to lay down clean succession plans amid a much less favourable business environment in the city than that enjoyed by their patriarchs in their earlier days.
Succession plans for Cheng had been in place since 2012 when his son Henry Cheng succeeded him at the helm of New World. Cheng’s grandson Adrian Cheng was also appointed to top roles at New World and jeweller Chow Tai Fook, while his granddaughter Sonia Cheng was tasked with running the Rosewood hotel group, which New World owns.
However, this transition contrasts with other families still grappling with how to hand over multibillion dollar businesses in the face of sibling disputes and competition from mainland China.
From the 1970s, tycoons like Cheng, Li Ka-shing, Lee Shau-kee and casino kingpin Stanley Ho expanded their businesses unhindered, boosted by rapid economic development and favourable regulations. These tailwinds helped them dominate the city’s transport, retail and property sectors.
This oligopoly has faced challenges in recent years due to slower growth, a more interventionist mainland government and heightened grassroots political pressure to reduce the dominance of big conglomerates.
David Webb, a shareholder activist who operates a corporate governance website in the city, said the main threat to the tycoons’ Hong Kong businesses was a slipping grip on power in the political structure that had previously enabled them to fend off competition from outsiders.
Cheng had a number of sweetheart deals with the government such as the construction and management of the financial city’s main convention and exhibition center where Hong Kong’s 1997 handover ceremony took place.
“Some of their past economic success through cartels will not be possible in the future,” he said.
While Li Ka-shing, the city’s richest man, also mapped out his succession plan in 2012, other families have had high profile disputes.
Brothers Raymond and Thomas Kwok took control of the city’s largest property developer, Sun Hung Kai Properties, in 2008, sparking a feud with their elder brother, Walter, that reached an agreement in 2014. The family of Macau casino billionaire Ho, who has three surviving wives and 17 children, battled publicly over his assets, before a truce was declared.
Meanwhile, China grows more important for Hong Kong’s tycoons. Many are now publicly showing their allegiance to the mainland at a time when some residents in the city are calling for independence, a move that would have been unthinkable a few years ago.
Chow Tai Fook Jewellery has struggled over the past two years after a Beijing-led crackdown on corruption dampened demand for luxury jewellery from mainland tourists, who have shunned Hong Kong’s retailers in favour of other destinations.