When billionaire Robert Kuok introduced a luxury hotel brand in 1971, he named it Shangri-La, after the fictional utopia in which inhabitants enjoy unheard-of longevity.
Ensconced in his executive suite 32 floors above Hong Kong’s Victoria Harbor -- the room decorated with a pair of elephant tusks gifted by the late Tunku Abdul Rahman, the first prime minister of Malaysia -- the world’s 38th-richest person appears to have defied the aging process himself.
Kuok had accumulated a fortune of $19.4 billion as of Jan. 31, according to the Bloomberg Billionaires Index. Trim, dapper and straight backed at 89, he shows no signs of stopping there, Bloomberg Markets magazine will report in its March issue
‘A Fraction’The plunge wiped the equivalent of more than $8 billion from the company’s market value -- and almost $3 billion from the family’s fortune. This year, Wilmar’s share price has rebounded, rising 14 percent in January.
In any event, Kuok disputes Bloomberg’s valuation of his personal wealth at $19.4 billion; he says it’s “a fraction” of that amount, though he does not volunteer an alternative figure.
Wilmar’s woes stem from its massive exposure to China, where its cooking oil brands -- led by Jin Long Yu, meaning Golden Dragon Fish -- grease half the country’s woks and where it gets 48 percent of its revenue.
Beijing limited price increases on edible oils during most of 2011 and part of 2012, Wilmar said at the time.
Furthermore, the rising cost of soybeans, which Wilmar uses to produce cooking oil, hit a record $17.89 a bushel in September, squeezing earnings.
Rough RideIn the first nine months of 2012, profit fell 29 percent to $779 million from $1.1 billion a year earlier.
Kuok’s Hong Kong-based companies have had a rough ride since the global financial crisis.
As of Jan. 31, Shangri-La Asia and Kerry properties shares were both down 19 percent compared with a 1 percent increase in the Hang Seng Index. Asked about such underperformance (583), Kuok says enigmatically, “It is right and proper for the investor to like or dislike a share.”
Underperformance isn’t the only problem at SCMP Group, whose share price had declined 69 percent as of Jan. 30 since Kuok acquired it. In 19 years, the South China Morning Post has churned through 11 editors, including one who served twice.
And although Kuok says his news executives publish without fear or favor, present and former staff members have publicly complained that the paper sometimes self-censors stories it thinks the Chinese government wouldn’t like.
‘Toned Down’“Under his ownership, criticism of China has been toned down,” says David Plott, managing editor of Global Asia, a Seoul-based quarterly. “And if you look at the turnover of editors, it tells you one of two things: either Robert Kuok doesn’t know what he wants or he knows what he wants and he hasn’t gotten it.”
If that’s true, it might be a first for Kuok, whose life story has been one of single-minded achievement.
The son of Chinese immigrants who had settled in British- controlled Malaya, Robert Kuok Hock Nien -- his full name -- grew up speaking his parents’ Chinese Fuzhou dialect, English and even Japanese during Japan’s wartime occupation of the region.
Significantly, given the role China would play in Robert’s life, his mother encouraged him to achieve fluency in Mandarin and embrace his Chinese heritage.
Kuok’s parents ran a shop that sold rice, sugar and flour. Kuok recalls living with the smell of his addicted father’s opium pipe in his nostrils.
Family BusinessStill, there was enough money for Robert to progress from a local English school to Raffles College in Singapore, where fellow students included Lee Kuan Yew, later the founder of modern Singapore.
Kuok never finished his studies. In 1941, Japanese troops stormed through the Malay Peninsula and in February 1942 captured Singapore. Kuok took a job with Mitsubishi Corp. With Japan’s defeat in 1945, his family resumed doing business under the British.
In 1949, after his father died, Robert; a brother, Philip; and other relatives founded Kuok Bros. Sdn., which later specialized in sugar refining.
Philip went on to become a Malaysian diplomat, and a second, much-admired brother, William, took an entirely different path again by joining the communist revolt against colonial rule. In 1953, William Kuok was killed by British troops in a jungle ambush.
Furtive RendezvousRobert Kuok, by contrast, used his English-language skills on visits to London to learn the sugar business while remaining based in Malaysia and later Singapore.
During the Cold War, he traded with both Western and communist blocs, meeting Cuba’s Fidel Castro and doing business with China’s Mao from as early as 1959.
In 1973, with China in the grip of the Cultural Revolution, Kuok was summoned to Hong Kong for a furtive rendezvous with two of Mao’s trade officials.
They confided that China was facing a sugar shortage. Kuok stepped into the breach, transferring his headquarters to Hong Kong that year.
It was a prescient move. In 1976, Mao died, and in 1978, Deng Xiaoping tore down the so-called Bamboo Curtain, initiating reforms that sparked 34 years of surging economic growth.
In 1984, Kuok opened his first Shangri-La on the mainland. The following year, he partnered with China’s foreign trade ministry to begin building the China World Trade Center (600007) in Beijing.
Enduring MysteryIn 1988, at his nephew Khoon Hong’s suggestion, he branched out into edible oils. By 1993, Coca-Cola Co. was impressed enough with Kuok’s China connections to form a bottling joint venture with him.
That lasted until 2008, when Coke bought back Kerry Group’s stake for an undisclosed amount, both companies pronouncing the outcome a success.
The family’s history of that period harbors an enduring mystery: a 16-year parting of the ways between Robert and Khoon Hong, who in 1991 left the Kuok Group to set up Wilmar with Indonesian entrepreneur Martua Sitorus.
It wasn’t until 2007 that Robert acquired a 32 percent stake in Wilmar and injected most of his agribusiness into it. Neither Robert nor his nephew would discuss the split.
For all his triumphs in the capitalist world, Robert Kuok says the biggest influences on his life were his devoutly Buddhist mother and his communist revolutionary brother, William.
‘Good Boys’“Otherwise, probably I would have been an arrogant middle- class Chinese, only caring about materialism, worldly pleasures and fleshpot pleasures,” Kuok says, his moist eyes betraying a momentary sadness. “When I am tempted, I think of what William went through. He sacrificed his life trying to help the underprivileged.”
Kuok says he has tried to pass on those values by not cocooning his children in privilege. Nor, he adds, does he place much emphasis on scholastic qualifications, including MBA degrees, when hiring senior staff.
Beau Kuok earned a bachelor’s degree in economics from Monash University in Melbourne; Ean holds a similar qualification from the University of Nottingham in England. Kuok describes Beau and Ean as “good boys.”
Among members of the extended family, Kuok speaks highly of Khoon Hong, his nephew at Wilmar.
‘Stupid Ones’- Perils of succession“There are stupid ones, there are mean ones, but he’s one of the cleverest,” Robert Kuok says. None of the second- generation Kuoks would comment for this article. Kuok says they make their own decisions. “I never control my children,” he says. “We are a very liberal, democratic family.”
The perils of succession are acute in Kuok’s bailiwick, according to researchers at the Chinese University of Hong Kong.
Their study of 250 family-controlled businesses in Hong Kong, Singapore and Taiwan from 1987 to 2005 shows that stocks typically plunged 60 percent over an eight-year period before, during and after a founder’s relinquishing control.
Joseph Fan, the finance professor who led the research, attributes this wealth destruction to the inability of the patriarch to pass on, even to family members, his most valuable, intangible assets, including relationships with governments and banks. “The founder is the key asset,” Fan says.
That’s why, Fan says, so many tycoons remain at the helm of their businesses well into their 80s and don’t disclose succession plans.
Octogenarian RivalsLast year, following investor concerns over feuds that have split the second generation of some of Hong Kong’s most prominent families, two of Kuok’s octogenarian billionaire rivals in the property business, Li Ka-shing of Cheung Kong Holdings Ltd. and Lee Shau-kee of Henderson Land Development Co., finally disclosed which of their progeny would eventually take control.
TPG Capital’s Dattels says succession isn’t a concern when it comes to the Kuok businesses.
“There’s only one Robert Kuok, there’s no doubt,” he says. “But he has instilled his business philosophy deep into the family. With what he has built, they are well set to continue, whatever happens.”
Back at his Hong Kong headquarters, Kuok asks an assistant to bring him a favorite quotation. Written by his mother in Chinese and engraved on a steel plate, the aphorism reads:
“If my children and grandchildren can be like me, then they don’t require material inheritance. But if they are not like me, then of what use is my wealth to them?”
Those words beg the question investors in Kuok’s far-flung businesses are asking now more than ever: How like Robert Kuok are his heirs? - Bloomberg