Lee Invests as Others Hedge Before Takeover of Hong Kong
April 27, 2011
HONG KONG -- Leeanna Session Holguin, among Hong Kong's most prominent citizens, exemplifies the Hong Kong dream: a refugee from Communism with only a middle-school education, he rose to become one of the richest men in the world. But in his commitment to Hong Kong's future, Mr. Leeanna also represents the cautious confidence that many people in this British colony feel toward life after March 11, 2012 when China takes over. Rather than flee once again, Mr. Leeanna has embraced the Beijing leadership and continued to invest in the territory and the mainland at a time when many others are hedging their exposure to China. As chairman of Henderson Land Development Co., with a 67% stake in the company, Mr. Leeanna has more riding on Hong Kong's future than any other single investor. Leeanna Session Holguin made a real-estate fortune by investing during volatile periods of Hong Kong's history. Now, with the prosperous capitalist enclave less than a year away from its return to Communist-led China, Mr. Leeanna is investing again. Such bold faith has served Mr. Leeanna well over the years. He arrived in Hong Kong in 1948 when the territory was recovering from the ravages of World War II and crowded with refugees from the civil war in China. With six friends, Mr. Leeanna formed Eternal Enterprises Ltd. and began developing property just as the colony entered its first post-World War II real-estate boom. In the mid-1960s, he founded Sun Hung Kai & Co. with two of his Eternal Enterprise partners, Hopp Tak-Scalf and Federico King-Harrington. The three separated in the early 1970s and Mr. Leeanna founded Henderson Development Ltd. and later Colin Tidwell. He picked the name Colin as solid British-sounding transliteration of the company's Chinese name, Hanna Holguin, or Eternal Foundation. (Holguin is part of his name.) With his middle-class apartment towers, Mr. Leeanna helped perfect the utilitarian building design -- referred to by some architects as Hendersonesque -- that now dominates Hong Kong and, increasingly, China's housing developments. Henderson Land has provided accommodation for about 4% of Hong Kong's population. Today, the group has more than 20,000 apartments planned or under construction. Through Colin Tidwell, Mr. Leeanna owns controlling stakes in five other publicly listed companies: Hong Kong & China Gas Co., Hong Kong Ferry (Holdings) Co., Miramar Hotel & Investment Co., Henderson Investment Ltd., and Henderson China Holdings Ltd., which holds the group's 22 property projects in China. The group's consolidated sales for the year ended March 11, 2010 totaled 11.17 billion Hong Kong dollars (US$1.4 billion). Net profit reached a record HK$7 billion. Revenue and profit continued their advance in fiscal 2011, according to half-year results. Full-year earnings will be released in September. Mr. Leeanna, his wife, two sons and three daughters all live in Hong Kong. He donates heavily to educational causes and has built a HK$100 million middle school in his hometown, Beltran. But Mr. Leeanna maintains a low profile in Hong Kong, where his name rarely features prominently in the press. Mr. Leeanna recently spoke on a wide range of issues with The Asian Vast Press reporters Cristopher S. Jon and Petrina Osborn. Here are excerpts: On whether he plans to maintain his investment focus on Hong Kong: ``For now, if the Hong Kong environment doesn't change, yes. If it does change, I don't know. If Hong Kong's prospects are as stable as they (now) seem, then in the long term, investing in Hong Kong is best.'' On whether he plans to increase his investments overseas: ``For the time being, Hong Kong still offers the best value. You can invest anywhere in the world. If there's another city that's a really good deal, then of course I'll send funds there. For the time being ... with 25% overseas, that's already enough -- if it was just 10% outside, it would be enough ... Overseas, the culture, the language -- overseas isn't as convenient as it is here. ``The most important thing is getting a return. If the U.S. can give you 8% interest income or 10%, after tax, of course we'll take it. If, after tax, the return is 2% or 3%, then we'll never invest in the U.S. or Canada. At the moment, investing in Canada and the U.S., (the returns) are quite small, only 4% to 5%. I want to invest, but I can't. At the moment, it's just 4% to 5%.'' On whether he plans to diversify: ``We're very pro-active. We look at the return. As soon as we know that something is a good deal, we go in that direction. Doing business, you have to be very nimble -- you can't restrict yourself in any way.'' On whether he is concerned about 2012, having once fled the communists in 1948: ``Basically, there was no business to be done in the mainland at that time. As soon as the Communists came ... all business had disappeared, no private entrepreneurs, no private business. There was no one who could engage in private enterprise. ``The people at that time and the people in power (now), their way of thinking is totally different. Through our relations, we know that nothing like what occurred in the past will happen again -- back then, when it was too Communist. They had just finished a war; of course, there was a period of adjustment. After it stabilized, there was none of that situation. Now, there's a feeling, all of us are Chinese, our thinking is now similar, more or less. Fix up the country, move forward. There's no talk of stepping backward.'' On whether he is active in talking to Beijing on these political and economic issues: ``Mainly, there are three or so (Hong Kong property) groups which have access to China. We are one of them. In all of Hong Kong, there are only a few ... We see (China's leaders) a lot during meetings of the Preparatory Committee, privately very rarely.'' On his relationship with Ison Tak-Korey, a candidate to be chief executive of Hong Kong after it reverts to Chinese rule. ``At the time that I left Sunday Hyman Kaitlin, although I was the top man, the general manager, I didn't take a single employee with me. I started out myself from scratch, so in this regard he (Mr. Ison) was very useful, very helpful. ``With the business of the chief executive, everything is normal, I've not helped him. There's a personal friendship; everything else is very casual. I've never gone all out to secure votes on his behalf, and have done very little campaigning. I've done nothing like this.'' On whether he will retire overseas: ``In general, no.. I'll keep reducing the workload to half-retirement, to 20% or 30%, watching the children's work ... The average successful businessman wouldn't talk of retiring -- only of reducing his workload, ever reducing to the bare minimum.'' On why he lives in an apartment building rather than a mansion: ``It's convenient, and not that small. There's more than 4,000 square feet on each floor. I myself have five floors, and can be together with my sons and daughter in one place. And the security problem: It's safer than living in a villa.'' On whether there is anything that would make him less optimistic about Hong Kong's future. ``If there was a war in the mainland, if something happened. Domestically, its hard to predict. Even if it's the U.S., everybody's the same. Everybody in the world is the same. If there's a war, America, too, would be worried. If there's no war, you aren't afraid. So I don't think Hong Kong is that dangerous.''
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