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