Li had a `long, good run' here
Has hands full in Europe and China
DAVID OLIVE
If not for Canada's restrictive bank-ownership laws, the richest man in Asia would long ago have gained control of Canadian Imperial Bank of Commerce. Billionaire Li Ka-shing of Hong Kong would have preferred to increase his CIBC stake well beyond Ottawa's 10 per cent limit for individual owners of the Big Five banks.
So we'll never know if Li, long regarded as the Warren Buffett of Asia, would have cleared out the executive suite at the stumbling CIBC during his three decades or so as its largest shareholder, as he did in the early 1990s after gaining control of an ailing Husky Energy Inc.
Li announced Wednesday he will use much of the proceeds from selling his family's 4.9 per cent interest in CIBC, worth about $1.2 billion, to create what will likely be Canada's second-largest charitable foundation — one of the richest gifts to Canada by a foreigner.
Canada has rewarded Li's faith in it, dating from the 1980s, when, like many Hong Kong industrialists, he invested heavily in Canada as a safe haven prior to the 1997 handover of Hong Kong to Beijing. But now, with their hands full developing wireless operations in Europe and real estate and infrastructure projects in mainland China, it makes sense that the Li family "wouldn't overstay their financial welcome after a long, good run in Canada," says a Canadian financier who has worked with them.
"It's not a case of bailing out of Canada," he says. "In fact, I wouldn't rule out their returning to Canada in other areas, especially infrastructure projects like ports and power plants, where they have tremendous knowledge."
Almost as remarkable as the Lis' donation is the family's reluctance to second-guess a series of chief executives at CIBC. Li, 76, is not particularly forgiving. Hired hand John Lau, recalling his motivation in fixing Husky in the early 1990s when it was bleeding hundreds of millions of dollars worth of red ink, cited Li's extraordinary memory for details.
"If you tell him one thing," Lau told the Financial Post, "you will be hunted down for the rest of your life until you produce." (Li's investment in Husky has since increased in value by a factor of 15 or so.)
Eldest son Victor Li, 40, has inherited his father's uncompromising approach to deal-making, abruptly scuttling his proposed bailout of ailing Air Canada last spring when he was unable to overcome his pique with intransigent union negotiators. At the same time, as reported by the Star's Martin Regg Cohn last April, the Li conglomerate of developers, pharmacies, supermarkets, drug stores and much else was boycotting two local Hong Kong dailies for their temerity in doubting the sagacity of Li's huge bet on 3G wireless technology.
Generally speaking, it hasn't been wise to bet against Li, whose $60 billion (U.S.) empire is one of the world's largest investors in third-generation mobile-phone networks, the world Number 1 operator of container terminals, and a leading investor in Pacific Rim real estate and infrastructure projects, embracing everything from condo projects to bridges, tunnels and power and water-treatment plants.
Not even Buffett has coups to match Li's bonanza with Orange, a start-up European telecom in which Li's initial $1.16 billion (U.S.) investment grew to $33 billion (U.S.) in less than a decade, when it was sold to a rival in 1999.
The Li family has a stronger connection with Canada than any other country outside Hong Kong and the Chinese mainland. Besides Husky, they redeveloped Vancouver's Expo '86 lands and have owned trophy properties including Toronto's Harbour Castle Hotel. Frank Sixt, 53, a Canadian lawyer recruited from Stikeman Elliott's Hong Kong branch, is group finance director for the entire Li empire. Li Ka-shing rotated both his sons, Victor and Richard, through his Canadian holdings for their business apprenticeships. The sons retain their Canadian citizenship, as do Victor's three children and his wife, Cynthia Wong.
Li, whose given name means "commend sincerity," already has donated more than $1 billion (Canadian) to various causes, notably the construction of schools in mainland China.
There's no reason to doubt the generous sentiment in Li's explanation Wednesday that the rationale for setting up the Li Ka Shing (Canada) Foundation is "in recognition of the warm welcome Canada has extended to me and to our group of companies over the years."
Still, one can't help speculating on the impact of the Air Canada debacle.
Depicted as a carpetbagger in the 1980s when his new Vancouver condos were being snapped up by wealthy Asian buyers, Victor stepped briefly into the spotlight to insist that "I made my biggest investment about six years ago when I became a Canadian and a British Columbian. I came 10,000 miles to make friends, not enemies, not controversies."
Even more reclusive after he was the victim of a failed 1996 kidnap attempt, Victor maintained an exceedingly low profile during his bid for Air Canada, an exceedingly public enterprise.
This time, when his commitment to Canada was questioned by union leaders and others, Victor stubbornly refused to be drawn into a public discussion on the airline's fate.
As a result, says the Canadian financier who worked with the Lis on the Air Canada deal, the carrier's union leaders didn't appreciate the degree to which "the Lis would love to have owned Air Canada. It would have been their first airline, and they picked Air Canada when they could just as easily have bought United, American, Delta or any other carrier.
"The whole thing left a bit of a bad taste with Victor, who was surprised that the Lis weren't embraced more. It's a shame, because that deal would have kept them more tied to Canada.
Additional articles by David Olive
thestar.com |
