Li Ka-shing, whose life journey from humble beginnings as a wartime refugee who used to sweep factory floors in Hong Kong for a living to Asia’s biggest business fortunes became the epitome of entrepreneurship that inspired generations of Hongkongers, has announced his retirement after seven decades at the pinnacle of one of the world’s largest corporate conglomerates and amassing one of Asia’s biggest fortunes from building skyscrapers to selling soap bars.
Starting with some local property investments that cemented his wealth, Li built a business empire that included retail, energy, ports, telecommunications, media and biotechnology companies worldwide. Overseas, Li-controlled companies are among the biggest foreign investors in the U.K.
“I have decided to step down as chairman of the company and retire from the position of executive director at the forthcoming annual general meeting of the company,” Li said in filings for CK Hutchison Holdings and CK Asset Holdings to the Hong Kong stock exchange on Friday.
“I am grateful to have been able to create value for shareholders all these years, and serve society,” Li said. “This has been my greatest honour. I thank everybody for their love and support.”
"Looking back all these years, it’s my honor to have founded Cheung Kong and to have served society," Li told a packed room of journalists in Hong Kong on Friday. It’s been "my greatest honor," he said.
As Bloomberg notes, the 89-year-old chairman of CK Hutchison Holdings Ltd. and CK Asset Holdings Ltd. will stay an adviser to the group after stepping down in May.
Li personifies some of the conflicts that came from the region’s rise: Dubbed "Superman" by local media for his business acumen, he symbolizes inequality in a city with one of the most lopsided wealth demographics on the planet. He is a property developer who has won admiration for his entrepreneurial skills and a manager with companies so dominant that they often stifle smaller competition.
He also is an uber-capitalist who courted communist leaders. A major figure in China’s emergence as an economic superpower, Li is the most prominent among a generation of Hong Kong tycoons who charged across the border after Deng Xiaoping and his successors promoted economic reforms. His investments in the mainland span across industries ranging from energy to retail and infrastructure.
His elder son Victor, 53, will take over a conglomerate that touches the lives - literally - of practically everyone in Hong Kong - the family’s Power Assets Holdings Ltd. generates their electricity and ParknShop supermarkets sell their groceries. The group also operates mobile-phone stores and Superdrug and Savers in the U.K., owns ports around the world and a controlling stake in Husky Energy Inc. in Canada.
With a fortune of $34 billion according to the Bloomberg Billionaires Index, Li has been a fixture as the city’s richest man for an entire generation of Hong Kongers and spearheaded an era defined by a handful of swashbuckling Chinese immigrants who built large empires across Asia.
For many, he is the face of the changing fortunes of Hong Kong as the former colony’s British elite gave way to Chinese dynasties.
“Li’s retirement symbolizes the end of an era,” said Joseph P.H. Fan, a professor at the Chinese University of Hong Kong, who has researched family-run businesses for two decades. “No one can replace Li Ka-shing as the legendary founder of the largest conglomerate in Hong Kong.”
His retirement announcement illustrates his confidence over business continuity, given that he has prepared his son for several decades, Fan said.
Li said he will dedicate his time and effort toward philanthropy, led by the KS-LK Foundation, especially on issues related to medical health, and social issues.
One of the earliest Hong Kong tycoons to invest in mainland China, Li dismissed criticisms that his company had been selling Chinese assets to transfer money offshore as “ridiculous and illogical”.
“Asset trading is par the norm for business. Our group has 40 billion yuan (US$6.33 billion) in projects along the coastal regions of China on natural gas, including a major gas production project by Husky Energy. Even if we have sold assets on the mainland, the money returns to the company and belongs to all shareholders, unless we sell the shares.”
Li, who represented Hong Kong’s rags-to-riches story, also has a piece of advice for Hong Kong’s youth. “There are many opportunities available to the youth of today. The most important thing for young people is that they must bolster their competitiveness through the accumulation of knowledge.”
* * *
Li was born July 29, 1928 in Chaozhou, a city in southern China’s Guangdong Province. His father was a school principal but the young Li’s formal education stopped at high school as invading Japanese troops reached Guangdong. Fleeing war-torn China for Hong Kong in 1940, Li found factory work while also caring for his ailing father, who soon died from tuberculosis. By the time he was a teenager, Li was working 16 hours a day at a plastics trading company.
After the war, Li made his first fortune as a manufacturer of plastic flowers. His career as property mogul began in the late 1950s when, unable to renew his lease, he bought the site of his factory.
In the years to come, Li invested in local real estate as others sold, most notably in 1967, when riots inspired by Mao Zedong’s Cultural Revolution in China rocked Hong Kong and sent property prices plunging.
His most symbolic coup as a businessman may have come in 1979, when he bought control of trading house Hutchison Whampoa from Hongkong and Shanghai Banking Corp. Li quietly negotiated with the bank, now called HSBC Holdings Plc, to buy Hutchison shares for less than half their book value. HSBC agreed and Li became the first person of Chinese origin to own one of the British-founded companies that had dominated the local economy since the colony’s founding in 1841.
That reputation helped Li make inroads in China, where he mixed extensive political connections with financial interests. Li was a senior adviser to the Chinese government on Britain’s 1997 handover of Hong Kong and served on the committee that drafted the Basic Law, the city’s mini-constitution under Chinese rule.
His retirement announcement came "on a high note" as Li’s four biggest companies - CK Hutchison, CK Asset, CK Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. - reported higher 2017 profits. All four stocks rose, though announcement came after the end of trading in Hong Kong.
Pragmatic until the end, at the press conference to announce the companies’ earnings, Li said he did not see mortgage rates in Hong Kong – one of the world’s priciest urban centres – to rise by more than two percentage points.
“Should people keep chasing after higher and higher flat prices? If you have sufficient funds, buying a flat for your own use is OK regardless of market prices, as long as you can afford the mortgage payment,” said Li, whose CK Asset was one of the city’s biggest property developers.
On China’s legislature proposed move to remove a term remit on the presidency that would allow President Xi Jinping to extend his term, Li said: “If I have had the right to vote on this issue, I would support Xi, because China’s anti-corruption campaign has been effective in the past few years. That is a fact.”