Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
For decades, the Quack family in Singapore looked like a
model of a successful family run business.
Speaker 1 (00:14):
The Quick family. They are super influential Dath singaporese Rich's family.
Speaker 2 (00:19):
Cheryl Lee is a Bloomberg reporter based in Singapore.
Speaker 1 (00:23):
And they owned one of Singapore's biggest listed property developers,
so that's City Developments and then in turn is actually
part of a sprawling conglomerate with more than thirty billion
US dollars of gross assets. And they've always been viewed
as a successful model for family transition.
Speaker 2 (00:41):
But recently that image of a smooth, successful transfer of
power in the family business has been shattered. An explosive
lawsuit was filed by the family patriarch and chairman Quick
Lingbing against his son Sherman Quick, the company's chief executive officer.
Speaker 1 (00:59):
So basically what happened was that in February, two new
directors were appointed to City Developments Board without consent from
Linbing and a few other directors.
Speaker 2 (01:11):
Ling Bing wasn't happy. He claimed Sherman had bypassed the
proper committee to appoint those new directors.
Speaker 1 (01:18):
So he accused Sherman of attempting a bodroom coup, and
he felt a lawsuit against Sherman and some of the
other directors.
Speaker 2 (01:26):
The fight was quickly diffused, with the elder Quak dropping
the case, but the lawsuit has exposed key issues at
the core of a multi billion dollar family run business.
Speaker 1 (01:37):
This came as a shock to everyone because everyone on
the outside had thought that the transition had already happened smoothly.
And this what it shows is that there were these long,
simmery intensions for many years. Now it has all spilt
over into accusations of business incompetence, a botroom coup and
an outsider's influence. All that is potential risk to investors.
Speaker 2 (02:01):
And the spat has broader implications too. In this part
of the world more than others, Asian economies are often
built on multi generation family businesses and the quick dispute
has highlighted just how messy succession plans can get.
Speaker 1 (02:17):
So investors are looking at this case and wondering whether
they have properly priced in their risks when they look
at family run businesses and their stocks. And we know
that as many of these Asian patriarchs h and look
to pass down their businesses to the next generation of
as this is going to be an increasingly hot issue
(02:39):
that investors need to take note off and be aware of.
Speaker 2 (02:45):
Welcome to the Big Take Asia from Bloomberg News. I'm Wanha.
Every week we take you inside some of the world's
biggest and most powerful economies and the markets, tycoons and
businesses that drive this ever shifting region. Today on the show,
What's going on behind the boardroom door of one of
Singapore's largest developers run by its richest family, and how
(03:09):
are investors navigating the messiness of dynasty conglomerates. The Quick
family traces its roots back to China. Its original patriarch,
Quick Hong Pong, immigrated to Singapore from Fujian Province and
(03:29):
founded his trading business in nineteen forty one, but it
wasn't until the nineties that the Quick family's fortunes skyrocketed,
thanks in part to a property developer that they'd acquired earlier,
City Developments Limited or CDL.
Speaker 1 (03:44):
It was in nineteen seventy two that the Quak families
bought a controlling stake in that property developer. So CDO's
property portfolio includes apartment buildings, offices, hotels, retail malls. It
also owns hotel across the world under its Millennium and
Cockgun brand and Cheryl.
Speaker 2 (04:04):
Can you walk us through the main players of the
family run business now, sure?
Speaker 1 (04:08):
Yeah. Firstly there's Ling Bing. He's the second gen business
owner of CDL. He's eighty four now, he's the current
patriot of the family and he's the executive chairman at
the firm. So he is the second of Home Pong's children.
When he joined a business in his early twenties after
getting his law degree in London, and based on Lin
(04:30):
Bing's official biography, he was very much influenced by his father,
who taught him a lot about business, but who was
also a very tough boss. So his dad would scold
him harshly, and Ling Bing said that he actually learned
a lot true hardship under his dad. Yeah, exactly, typical
Asian father.
Speaker 2 (04:50):
Lan Bing also has a reputation for being a savvy businessman.
In nineteen ninety five, he famously bought a hotel owned
by Donald Trump in a deal that rot the business world.
Speaker 1 (05:01):
Trump was undergoing bankruptcy proceedings at that time, and basically
Liing Bing rejected a request by Trump to keep control
of the iconic Plaza hotel in New York City. So
in the end, what happened was that City Developments and
a CUD prince bought the iconic property for eighty three
million dollars, less than what Trump had paid for it.
Speaker 2 (05:24):
Ral So he's a very good businessman, Linbing.
Speaker 1 (05:27):
He is very visionary, keen on striking great deals, a
tough boss with high standards for everyone, including himself.
Speaker 2 (05:35):
Lin Bing's tough management style left a strong impact on
his own son. The other key player in the story
Sherman Quick.
Speaker 1 (05:44):
He is forty nine. He's the eldest son of Lin Bing,
and he is a hard working person. He has always
wanted to prove himself as a capable CEO to his staff,
to investors, and his own dad.
Speaker 2 (05:57):
Sherman became the chief executive of CDL in twenty eighteen
after years of working in the family business. The next year,
he led the company to make a huge investment that
resulted in cdl's first annual loss in nearly five decades.
Speaker 1 (06:13):
Sherman is the one who spearheaded this one point nine
billion singh dollar investment into Sincere Property Group. There was
the China investment that turned out to be disastrous. It
totally blew up, and so what happened after was that
sincere ran into liquidity problems and CDL had to sell
its stake phenomenal one dollar, so it was a total loss.
Speaker 2 (06:36):
CDL has now lost seventy percent of its market value,
or more than eight billion dollars, since its shares peaked
close to eighteen years ago. Much of that decline has
taken place since Sherman became CEO, although high interest rates,
COVID and government curbs have hit Singapore's property sector more
broadly too. The losses caused a rift in the family
(06:58):
and then a long time apprentice of the elder, Quak,
brought even more division.
Speaker 1 (07:04):
One other really important character in this story is Katherine Wu.
So Katherine Wo she met Quicklingbing in Taiwan in nineteen
ninety two. She is a musical person, a singer, and
she calls Ling being her benefactor and her boss, and
she moved to Singapore to be his mentee. Over the
(07:26):
next thirty years, she accompanied him to hotel inspections and
hotel meetings in Singapore and even in other countries. And
she has been very involved in the business and contributed
a lot. The tricky part is that when she issues instructions,
no one is quite clear whether she did it or
(07:49):
she is a proxy for the chairman.
Speaker 2 (07:53):
This irk Sherman the younger quak. He blamed Wu for
causing the family dispute and accused her of meddling in
business affairs beyond her scope. Things got so tense that
at one point father and son stopped speaking directly to
each other. After Ling Being filed the lawsuit in February,
accusing his CEO son of attempting a boardroom coup, Sherman
(08:16):
responded that he wasn't trying to oust his father and
pointed at Wu for being the source of the conflict.
But the very public feud ended almost as abruptly as
it had started. On March fourth, just about a month
after the lawsuit was filed, Ling Being released a statement
seeing Wu had irrevocably resigned from her role as an
(08:37):
unpaid adviser, and he dropped the case about a week after,
saying he and Sherman would keep their roles at cdl's
helm and investor's confidence needs to be restored, but shareholders
are already startled. Trading in the st was halted still
is halted. Singapore's riveted by the Quick Family drama that
(08:58):
feels ripped right out of a TV show after the break.
What do these succession feuds say about the state of
wealth and family business in Asia? The drama in the
(09:19):
Quick Family could be a warning sign for other family
businesses in Asia. To put into context the risks investors' face,
we brought in Dexter Low Bloomberg, Singapore real estate reporter
Dexter it sounds like you guys there are watching the
Singapore edition of Succession, You know the TV series play
out in real life?
Speaker 3 (09:37):
Yes, indeed, and it's something that has invariably attracted comparisons
in Singapore, a very public falling out, a lot of
much slinging from both sides that you don't really normally
see in covered scene in Singapore.
Speaker 2 (09:52):
Now. On the other hand, succession dramas and transitions happen
all around the world. What does the Quick Family saga
tell us about the broader challenges for transition of wealth
in Asian families?
Speaker 3 (10:04):
So thin the struggles that you are seeing right now
with the quas is not something that's unfamiliar to quite
a lot of large wealthy Asian families or even around
the world. I think one of the main challenges for
a lot of these families now is that they're hanging
over from what you called the second generation, the third
generation of younger scions, and a lot of them want
to bring the business in different directions. There's a Chinese
(10:27):
saying in Asia called football gods and that, and basically,
if you directly translated, it means wealth does not survive
past the third generation, and for a lot of families,
almost like a curse. And it's been documented both in
Asia but as well in the West that wealth doesn't
typically tend to go beyond the third generation or it
tends to start declining of the time. And one reason
(10:48):
for that, which Qua himself had talked about in the past,
is that families sort of disagree e other on how
to bring the business forward and how to distribute the wealth,
so to speak, and that can lead to feuds like
this one.
Speaker 2 (11:01):
So in these multi generation family businesses, the problems often
surface when it's time for the old guard to hand
over the reins of the business to the next generation. Right.
Speaker 3 (11:12):
So one of the major challenges that you have, essentially
in these kind of family businesses is that the patriarch
basically still wants to run the show. It leaves limited
room for the scion to devigate in the sense, and
that can lead to all sorts of problems. And another challenge,
of course, is that the world has changed quite radically
from when their fathers or their manners were bringing up. So,
(11:34):
for example, that's much more competitional, interest rates are much higher,
the economy is much more developed, and the opportunities or
the kind of chances to do huge scale deals or
set your name for yourself is much harder, and there's
the shadow of your parents of the older generation lingering
over ahead.
Speaker 2 (11:52):
According to one McKinsey report, eighty five percent of Asia's
businesses are family run. Many of the biggest names in
the region, Samsung to Toyota, are run by multi generational families,
and that makes the region especially vulnerable to the dramas
of family dynamics bleeding into the boardroom.
Speaker 3 (12:12):
It's general case that in Asia, families dominate businesses even
more so than in the West, where it's much more
institutionally run or much more controlled by say, activist investors.
And that's why for a lot of investors and people
looking to invest in this region. It's definitely a case
where you have to come take note of all these
(12:32):
family feuds and where they're going. And as we have
seen with the case of city developments, these issues can
definitely affect hole the stock performs.
Speaker 2 (12:41):
And in what way do you think this could be
a warning for other Asian clans as well who are
involved in businesses.
Speaker 3 (12:48):
I think it's definitely a warning sign to a lot
of families in Singapore bious the white region. We have
seen case of Hong Kong, for example, where you have
very public, very bits of intergeneration feuds which can lead
to huge splinters in the family. And it's same keys
in Singapore. And there's obviously the additional complexity because a
lot of these firms are listed and it's not just
(13:08):
the family the ones that have a say in the
future of these companies, but other shareholders as well. And
going forward, as we go into the annual general meeting
of shareholders, for example, we might see some of these
tensions play out.
Speaker 2 (13:21):
So dexter what's happening with the Quick family now.
Speaker 3 (13:25):
Going forward, there will be a no general meeting in
April where the chairman and the CEO is likely to
face shareholders so that will be one of the first
attempts for them to present a very united front to
the public and dexter.
Speaker 2 (13:38):
How does what's happening with this family shed light on
the risks of investing in family run corporations across Asia.
Speaker 3 (13:46):
I think this issue is being closely watched by a
lot of firms because we are at the stage where
a lot of firms, especially if we are state firms,
controls a huge, sizable part of single economy as well.
So the fact that succession plan that is so well
laid out and so well telegraphed can go so badly wrong.
(14:07):
It's probably quite worrying to not just shareholders and investors
in this market, but also do all these various families
that are very closely planning and thinking about what's next
for these firms as a lot of these patriarchs each
and start thinking about handing off the rains to a
younger generation.
Speaker 2 (14:31):
This is the big take Asia from Bloomberg News. I'm
wan ha. This episode was produced by Young Young and
Nomi m It was edited by Grace Jennings Edquist and
serena Um. It was fact checked by Naomi Aaron Edwards
and mixed and sound design by Taka Yasuzawa. Our senior
producer is Naomi Shaven. Our senior editor is Elizabeth Ponso.
(14:52):
Our deputy executive producer is Julia Weaver. Our executive producer
is Nicole Binsterborwer Sage Bauman is Bloomberg's head of podcast.
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