Malaysian Chinese Business Who Survived the Crisis

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Malaysian Chinese Business Who Survived the Crisis ...

Malaysian Chinese Business:

    Who Survived the Crisis?

Lee Kam Hing and Lee Poh Ping

    In the not so distant past, as economic growth was gathering pace in East Asia, Chinese enterprise was widely considered a significant factor in the process described as the Asian economic miracle (World Bank 1993; Anderson 1998). Ethnic Chinese in Indonesia, estimated at about 3 percent of the population, were said to own some 70 percent of firms listed on the Jakarta Stock Exchange. In the Philippines, 50 to 60 percent of the stock exchange’s market

    capitalization was reportedly held by Chinese, who form only 1.5 percent of the country’s population. In Malaysia, ethnic Chinese account for less than 30 percent of the population and were estimated to own more than 40 percent of corporate equity in 1997, while in Thailand it was said that 50 ethnic Chinese families controlled most of the country’s business sectors (Backman 1999). Highly publicized profiles of Chinese enterprise attracted great public interest and were used to illustrate the community’s strong economic presence in East Asia.

    Yet even prior to the Asian financial crisis of`1997 and among those accepting the dynamic contribution of Southeast Asian Chinese to the regional economy, concerns were raised that the extent of their corporate dominance was misrepresented (Mackie 1995). Figures showing business ownership by Chinese were challenged, and it was argued that such figures should be revised downward. The general political weakness of the Chinese in Southeast Asia, it was also maintained, made their businesses constantly vulnerable to policies limiting their capacity for growth and/or their ability to move into new sectors (McVey 1992). In many cases, they were forced to rely on connections with powerful groups to generate growth (Gomez 1999). Consequently, the sustainability of Chinese businesses in certain countries remained uncertain, even where they appeared to be a dominant economic force.

    And so when financial crisis on the scale of the 1997 debacle occurred, it was to be expected that Chinese enterprises in Southeast Asia would be the most affected. Indeed, this generally did happen. Significantly, however, Malaysian Chinese businesses appear to have suffered far less than their Thai and Indonesian counterparts. The number of Malaysian Chinese firms adversely affected by the crisis was nowhere near the number in Thailand, where it is said that of the more than 50 Sino-Thai families with dominant control of the economy, only 4 survived (The Straits

    Times, 29 January 2001). Nor were big Malaysian Chinese enterprises as affected in number or

    intensity as similarly-sized Indonesian Chinese firms. There, several prominent Chinese business groups, including the huge Salim Group conglomerate owned by Lim Swie Liong, have nearly collapsed. Further, the public impression in Malaysia is that Chinese companies were not as badly affected by the crisis as were firms owned by other ethnic groups.

    Determining the impact of the crisis on Chinese business in Malaysia is no easy task. There is, first, the complexity of the event, at once a currency and a debt crisis, to which the government’s response had a variety of implications. Second, Chinese business is not homogeneous, but is comprised of large, medium, and small-scale enterprises. As Mackie (2000) pointed out in response to the common practice of identifying Chinese business primarily with big corporate players, there are very few studies that examine lower-level enterprises in detail. Until such studies are carried out, it is improper to generalize about Chinese enterprise in any particular country. Hence, this article makes no pretence of being exhaustive, but does attempt to show the complexity of analyzing Chinese capital in Malaysia. We then review the crisis’ direct impact on

    the Malaysian currency, stock market, and debt; its indirect impact on the general economy; and the general shape and significance of the government’s response. Finally, we relate these, in specific detail where possible, to the various sectors of Chinese business and, where data can be found, discuss the findings.

    Key Concepts and Sources

    The classification of Chinese big business is not simple despite the considerable literature on this group. The Malaysian Ministry of International Trade and Industry (MITI) defines any enterprise with sales of over RM25 million as a large-scale enterprise. But that definition does not adequately convey the broad picture of Chinese big businesses, some of which have assets and sales in the billions. The common approach adopted by analysts is to look at the stock market for highly capitalized enterprises those within the top 50 or 100 firms that are Chinese-controlled.

    To this are added relevant Chinese capitalists appearing on lists of the richest Asians and Malaysians compiled periodically by Forbes, Fortune, Malaysian Business, and other local

    business journals. This approach does omit many big businesses controlled by Chinese, however, particularly “old wealth” families who have not publicly listed their firms for fear of losing

    control of them (although the number of these are shrinking with time). Even capital listed on the stock exchange may not constitute the total volume of shareholder wealth as many individuals have considerable private assets that have not been injected into the listed enterprises. Furthermore, a major Chinese business figure or family may control more equity in a quoted company than is listed in its name.

    Despite these limitations, the classification of big business used here does not depart from the common approach because of the difficulty of coming by reliable data. We have obtained names from the Kuala Lumpur Stock Exchange (KLSE); from figures published by the national asset management company, Pengurusan Danaharta Nasional, concerning companies whose debts it has taken over; from the list of companies filing for protection from creditors (as of mid-July 1998); and from other government publications. While these sources do not indicate the ethnicity of companies, it is not difficult to identify the better-known Chinese-owned or controlled companies. Relevant magazines and newspapers, especially local publications which often give

    more detail than non-Malaysian journals, have also been consulted. Finally, interviews with knowledgeable Malaysians supplement gaps in the published data.

There is also a problem defining SMEs, “small- and medium-scale enterprises,” a term often

    used interchangeably with SMIs, “small and medium industries.” Here, SMIs refer to enterprises primarily involved in manufacturing, while SMEs refer to the larger group that includes such non-manufacturing industries as retail. The problem is that the definition of SMEs/SMIs has varied greatly over time according to different agencies using different terms (Rogayah 2000). For example, the Credit Guarantee Corporation first defined an SMI as a registered business with net assets and shareholder funds of not more than RM250,000. In 1988, this definition was revised upward to not more than RM500, 000. MITI, on the other hand, considers a “small-scale

    industry” (SSI) as one with a paid-up capital of below RM500,000 employing less than 20

    people, and a “medium-scale industry” (MSI) as one with a paid-up capital of between

    RM500,000 and RM2.5 million employing less than 75 full-time employees. Since then, a new definition of SMIs has been provided to include firms of not more than 150 workers with annual sales not exceeding RM25 million. In May 1996, following the establishment of the Small and Medium Industries Development Corporation, this definition of SMIs was refined. Small-scale companies are those which have employees not exceeding 50 and annual sales turnover not exceeding RM10 million. Medium-scale companies have 51 to 150 employees and annual sales turnover of between RM10 million and RM25 million. In this article, where data can be found on SMEs or SMIs, the definition that comes along with it will be accepted.

    The last comprehensive survey of SMEs was carried out in 1994 (Chandraswami, Wong, and Ong 1999), and therefore reliable figures on the number of these enterprises are not easy to obtain. It is even more difficult to get statistics on specifically Chinese SMEs because registration, as for the larger companies, is done by business, not ethnicity. Estimates can be made, however, by checking the number of SME bank loan applications and by utilizing membership lists of trade and business associations that are obviously Chinese dominated. For instance, a press statement issued by the President of the Selangor Chinese Chamber of Commerce and Industry placed the number of its SME members at 2000. The Plastic Manufacturers Association in Malaysia estimated its membership at 1600. The Malaysian furniture industry includes about 3000 manufacturers ranging from small cottage industries to large, integrated producers with their own raw material and wood-processing facilities (Malaysian Business, 1 January 2001). By compiling such information, we can estimate the

    number of SMEs at around 200,000. Of these, 22,000 are SMIs involved in manufacturing and industry. More than 80 percent of these SMIs are Chinese-owned.

    Finally, although the various definitions of SMEs and SMIs have no lower limits, there is actually a third level of business that is much smaller. These are the sundry shops, coffee houses, photography studios, and other such businesses that exist in large number, many owned by

    Chinese. Because of the extreme difficulty of obtaining data on these very small businesses, however, they cannot be considered here. Our main focus in the “small and medium” category

    will be on the SMIs.

    Financial Crisis: Impact on Malaysia and Government Response

    The direct impact of the financial crisis was seen in the precipitate drop of equity prices of firms listed on the KLSE. In February 1997, the KLSE composite index peaked at 1,271 points, and on 1 September 1998 it reached an historic low of 262. This sharp decline in the value of quoted equity was triggered by foreign investors pulling out funds and a simultaneous speculative attack on the Malaysian currency. The government would argue that many of those involved in currency speculation were also fleeing the stock market and that this contributed to the severity of the fall of both the ringgit and corporate equity.

The stock market and ringgit’s drop was devastating to highly-geared enterprises. Companies

    that had taken loans from abroad found that the sudden depreciation of the ringgit increased the size of their loans and interest payments appreciably. Those businessmen whose loans from domestic banks were pledged against shares experienced margin calls when the value of their shares fell. Reports that some banks were disposing of pledged shares further depressed prices on the stock exchange. The sharp decline of the KLSE and the specter of companies unable even to service interest on loans then created pressure on bank liquidity. By June 1997, the exposure of banks to property and stocks had grown to 40 percent, and the fall in property and equity prices left them suddenly quite vulnerable (Malaysian Business, 16 October 2000). This liquidity

    crunch led to a general loss of confidence in the economy, a situation that further deteriorated in early 1998 with a spate of large withdrawals of deposits. There were signs of runs on one or two financial institutions, some depositors began moving money to branches of foreign banks in Malaysia, and others transferred funds out of the country altogether. Local banks responded by raising interest rates, which in turn worsened the debt situation for private enterprises.

    This sequence of events precipitated a massive contraction of the Malaysian economy. During the first six months of 1998, the Gross Domestic Product (GDP) shrank by 8.4 percent. The third and final quarters of 1998 saw negative growth of 10 percent. After more than a decade of steady economic expansion, Malaysia was in recession. The contraction was seen in all sectors, but most sharply in construction, which shrank by 22 percent, followed by manufacturing (10.2

    percent), agriculture (9.2 percent), and services (1.7 percent). In the period 1996-1998, private investment registered negative growth of 19.7 percent while foreign direct investments (FDI) also declined. It was only toward the end of the first quarter of 1999 that positive growth returned, reaching 4.1 percent in the second quarter of that year.

    As more and more companies became heavily burdened with debt, the government adopted measures to shield the country from further financial instability. The most common option available to debt-burdened companies was a restructuring process under Section 176 of the Malaysian Companies Act 1965, under which 30 publicly-listed companies were granted protection from creditors in September 1998. Creditors complained, however, that companies abused Section 176 by incurring further liabilities or by hiving off assets to their directors or substantial shareholders. To supplement the existing, inadequate mechanisms, Bank Negara, the central bank, set up the Corporate Debt Restructuring Committee (CDRC) on 17 August 1998. Through the CDRC, still viable companies owing at least RM50 million and having more than one creditor could work out a corporate restructuring in a more amiable atmosphere. Without resort to legal procedures, restructuring was planned jointly by companies and creditors. A total of RM45.9 billion worth of debts have been referred to the CDRC. Of those debts, 38 cases involving RM25.7 billion had been restructured and another 20 cases accounting for RM16.3 billion remained to be re-worked as of late 2000 (Malaysian Business, 16 October 2000).

    The government took several other steps to assist companies’ recovery from the financial crisis. First, the Prime Minister established the National Economic Action Council (NEAC) to advise on the country’s economic recovery. The NEAC was placed under the control of former Finance Minister Daim Zainuddin, who had been credited with pulling the country out of recession in the mid-1980s. Second, the government introduced capital controls. Effective 1 September 1998, the ringgit was no longer tradable outside Malaysia and payments by residents to non-residents of RM10,000 and higher required the approval of Bank Negara. The exchange rate was fixed at USD1 to RM3.80, in contrast to the free exchange rate of RM2.50. This measure was significant in two respects. By stemming the outflow of capital, it reputedly saved the economy, and hence some Chinese businesses, from ruin. It also made Malaysian exports more competitive and benefited Chinese SMIs that exported goods.

    Third, in April 1998, the government established Pengurusan Danaharta Nasional to relieve the banking system of its non-performing loans (NPLs) and assets and to allow banks to resume normal business and strategic planning. There was an accompanying easing of monetary policies, wherein the statutory reserve requirement for banks was lowered from 13.5 to 6 percent and the base-lending rate of major commercial banks was reduced to 11 percent. The extent of the loan problem facing the country was evident in the value of NPLs. As of mid-2000, total NPLs in the system amounted to RM86.84 billion, of which Danaharta Nasional had acquired RM37 billion. The balance remained with financial institutions.

    Fourth, to help banks recapitalize as quickly as possible, a National Capital Fund, Danamodal, was established on 10 August 1998. At the same time, a concerted move was made by the government to consolidate the financial sector, the implications of which will be discussed below.

Finally, the government relaxed some limits on foreign equity participation. Where previously

    foreign ownership in a Malaysian venture was limited to 30 percent, the government now allows

    foreigners to hold majority control in the telecommunications industry and, if new investments

    are made, in the manufacturing sector. In stockbroking and insurance enterprises, foreigners can

    own up to 49 percent equity.

    General Impact on Chinese Business

Three years after the crisis, the Singapore-based Oversea-Chinese Banking Corporation (OCBC)

    studied the financial standing of large enterprises operating in the region and suggested that the

    big Chinese businesses remained strong. In Malaysia, the OCBC analysis argued that Robert

    Kuok, timber magnate Tiong Hiew King, Genting Group’s Lim Goh Tong, Sarawak-based Yaw

    Teck Seng, banker Teh Hong Piow, Hong Leong Group’s Quek Leng Chan, and power and

    property tycoon Yeoh Tiong Lay had emerged relatively unscathed from the crisis (The Straits

    Times, 29 January 2001). In Thailand, some Sino-Chinese family businesses were beginning to

    recover. Meanwhile, in Indonesia, a number of analysts argued that the return of the country’s

    Chinese would be necessary to drive the country’s economy to full recovery.

The government in Malaysia seemed to take a similar view of the economic resilience of the

    Chinese. In February 1998, the NEAC considered allowing non-Bumiputeras (Bumiputra refers

    to Malays and other indigeneous people in both Peninsular and East Malaysia) and foreigners to

    own a larger volume of shares of local companies (The Star, 21 February 1998). In July 1998,

    the NEAC reported that the market value of equity held by Bumiputera companies had dropped

    by 54 percent in the year since the crisis and that Bumiputera ownership of publicly-listed stock

    at market value had similarly declined from 29 percent in June 1997 to 27 percent in February

    1998 (The Straits Times, 24 July 1998). The NEAC recommendation was seen by some as an

    effort by the government to allow cash-rich Malaysian Chinese and foreigners to take over or

    inject cash into Bumiputera companies that were struggling with debt problems. It was only in

    the strategic industries of banking, automobiles, aerospace, and shipping that the 30 per cent

    ceiling on foreign ownership would remain in force. The suggestion that non-Bumiputeras be

    allowed to take up a larger stake to help recapitalize Bumiputera firms was not widely

    implemented. Instead, prominent Bumiputera-owned companies received government assistance

    in resolving their debt problems. Clearly, the government was unwilling to alter the equity

    balance among the ethnic groups despite the financial crisis.

In the financial sector, new moves by the government to stabilize the sector gave rise to concern

    among large Chinese firms. To consolidate and strengthen banks in the wake of the financial

    crisis and in preparation for World Trade Organization (WTO) liberalization, the Malaysian

    government directed that all fifty-four finance companies be merged into only six anchor

    institutions. Unease arose from the fact that of the six proposed anchor banks, only Public Bank

and Southern Bank were controlled by Chinese. The other Chinese banks would be absorbed into

    largely Malay-controlled or state-controlled institutions. Several of these, such as Ban Hin Lee

    Bank and Hong Leong Bank, had performed far better than the institutions they were to be

    absorbed into. The fear was that even Public Bank, Malaysia’s largest Chinese-controlled bank, would eventually no longer be in Chinese hands once its major shareholder, Teh Hong Piow,

    passed from the scene.

Following much protest and lobbying from the banking community, the number of anchor banks

    was raised from six to ten, mainly because two Malay banking groups not on the original list one headed by Rashid Hussein, the other by Azman Hashim lobbied successfully to retain

    control of their enterprises. Only one other Chinese-controlled bank, Quek Leng Chan’s Hong

    Leong Bank, was granted anchor bank status. The bank merger exercise was widely viewed as a

    setback for Chinese business.

More generally, the effect of the crisis on individual Chinese firms can be indirectly gauged by

    examining its impact on the different sectors of the economy. Table 1 shows participation in the

    various economic sectors by ethnicity. In the construction sector, which suffered the most severe

    contraction, 54.9 percent of firms were Chinese-owned. In manufacturing, the Chinese held 52.6

    percent of companies, while in agriculture, which fell by 9.2 percent in 1998, the Chinese

    business share was 57.9 percent.

    Table 1. Economic Sector Participation by Ethnicity, 1998

    Sector Bumiputera Chinese Indian Others* Total Agriculture 12.2 57.9 0.9 29.0 100 Mining 14.1 45.6 0.1 40.2 100 Manufacturing 8.7 52.6 1.0 37.7 100 Elec., Gas, Water 22.3 39.6 1.3 36.8 100 Construction 25.1 54.9 1.0 19.0 100 Retail & Wholesale 18.3 57.9 1.6 22.2 100 Transport 29.0 42.7 2.2 26.1 100 Finance 16.8 52.8 1.9 28.5 100 Others 29.0 49.7 2.1 19.2 100 * Foreign, joint companies of Malays and non-Malays, and others.

    Sources: Compiled from figures from the Economic Planning Unit (EPU), Malaysia.

    Impact on Big Chinese Business

The Chinese companies that proved vulnerable during the crisis were those that had diversified

    beyond their core businesses or had entered into speculative ventures. Acquiring quoted equity

and developing property were popular forms of asset building in the years preceding the crisis

    both were relatively accessible to the Chinese and easily liquidated. Further, property and stock prices had been rising steadily, in part due to the large inflow of overseas funds. The crisis had a two-fold impact on these firms. Those that had relied on heavy borrowing to diversify their operations were already experiencing problems, and when the currency depreciated, loan

    repayment became a struggle. How well these companies coped depended on whether they were able to service interest charges, meet loan repayment schedules, and make up the shortfall in the margin call of pledged shares that had fallen greatly in value.

    The sharp and immediate drop in property values also had severe consequences for companies that had recently shifted into property development and construction. According to the National Property Information Centre, about 16 million square feet of office space remained vacant in the Klang Valley alone in June 2000. At an absorption rate of 2-2.5 million square feet per year in a growing economy, it would take five to seven years for this vacant space to be occupied (Malaysian Business, 1 January 2001).

The individual large Chinese firms affected by the crisis fall into four categories:

    ? those unlikely to recover;

    ? those with heavy losses and loans in the process of restructuring;

    ? those with the reserves to ride out the period of low turnover and profits; and

    ? those which performed well during the economic slowdown.

The Casualties: Many of the first category can be found among companies that filed for

    protection under Section 176 of the Companies Act by mid-July 1998. Most notable was Time Engineering, a subsidiary of Renong, the largest Malay-owned conglomerate in Malaysia. The Chinese-owned or controlled companies that filed for protection include shipbuilder Westmont Industries, financial services firm MBf, appliance maker Kuala Lumpur Industries, property developer Wembley Industries, and stockbroker Uniphoenix. Other firms had their debts taken over by Danaharta Nasional. As of December 2000, 32 out of 76 companies placed under

    Danaharta special administrators were identifiably Chinese-owned. Several of these had been high profile in the pre-crisis period: Malaysia Electric Corporation, Jupiter Securities, Sin Heng Chan (Malaya), Instantgreen Corporation, Seng Hup Corporation, Timbermaster Industries, Woo Hing Brothers (Malaya), Bescorp Industries, Sri Hartamas, Rahman Hydraulic, and Kuala

    Lumpur Industries Holdings.

    Most of the companies or individuals who fell into immediate and serious trouble were those with heavy debt. In the pre-crisis period, a number of businessmen had taken huge loans to acquire properties or listed companies. Pledging shares of their own firms, some of which had price-earnings (PE) ratios of 18, to acquire companies with PE ratios of 6, seemed an intelligent way to expand and diversify. In a period when loans were easy to obtain, some investors then

used the acquired shares to make further acquisitions. These corporate raiders bought up sizeable

    numbers of shares of targeted companies with the aim of driving up share prices before disposing

    of them at a huge profit.

Two businessmen known for ambitious acquisitions and takeovers who later came to grief are

    Soh Chee Wen and Joseph Chong Chek Ah. Soh began with the takeover of a company called

    Autoways Holdings. He subsequently acquired, among others, the stockbrokerage firms

    Uniphoenix and Halim Securities and the manufacturer Perstima (involved in the production and

    sale of electrolytic tin plate for the canning industry), which he later sold off. But Soh became

    heavily indebted and his companies were eventually placed under Danaharta Nasional’s special administrator.

Like the businesses acquired by Soh Chee Wen, some of those bought by Joseph Chong were

    considered healthy, such as the publicly-listed Wing Tiek Holdings and Westmont Industries.

    Other of Chong’s companies included Westmont Land, later re-named Techno Asia Holdings,

    and Prima Mould Manufacturing. Chong took over Sabah Shipyard and proceeded to acquire the

    National Steel Corporation of the Philippines. But in mid-1997, talk began of major financial

    problems at Westmont Industries. According to a report in The Edge (16 November 1998), an

    investigative audit revised Westmont’s accounts to indicate a huge loss instead of profits for the

    1996 financial year. The crisis greatly aggravated Chong’s problems. As of December 1997,

    Westmont’s losses amounted to RM651.4 million and liabilities totaled RM883.7 million,

    including short-term and other debt of more than RM400 million. Westmont became the first of

    30 publicly-listed companies to file for protection under Section 176. Chong’s Wing Tiek Holdings, which had accumulated losses of RM200 million, was also forced to restructure.

    Chong is no longer associated with the two companies.

Perhaps the most spectacular corporate fall due in part to overexpansion and the crisis was that of

    Lim Thian Kiat (better known as T.K. Lim) of Multi-Purpose Holdings. Multi-Purpose Holdings

    was once linked to the Malaysian Chinese Association (MCA), a senior member of the ruling

    Barisan Nasional (BN) coalition. Lim’s family had used its own company, Kamunting, to gain control of MPH during the 1986 recession, however, after the firm went on a massive acquisition

    binge and subsequently suffered heavy losses. Lim belonged to the new generation of young and

    ambitious corporate players, and under his control Multi-Purpose Holdings expanded further.

    Lim also had political connections and was reportedly close to Anwar Ibrahim, Malaysia’s

    Deputy Prime Minister between 1993 and 1998. The heavily-diversified Multi-Purpose Holdings

    group included Multi-Purpose Bank, Malayan Plantations, property developer Bandar Raya

    Developments, and the gaming firm Magnum Corporation. By 1997, Multi-Purpose Holdings

    had incurred debts amounting to RM2.2 billion, and Lim’s Hong Kong investments were also

    said to have suffered heavily from falling property values.

    The Restructuring: The second group of Chinese enterprises are struggling to restructure company debts. Among these is the Lion Group, controlled by William Cheng, which has

    substantial interests in nine publicly-listed companies as well as investments in China. Following

    the depreciation of the Malaysian currency, the group began to have problems servicing its

    roughly RM10.4 billion in debt, about half of which was secured in US dollars. The loans were

    taken for Lion Group’s investments in China and for the construction of a RM2.5 billion steel

    plant in Banting, Pahang, by Cheng’s private firm, Megasteel. Cheng’s stock broking business –

    with brokerages in Malaysia, Indonesia, Singapore, and the Philippines suffered huge losses

    following the stock market fall, further weakening the group’s financial position. The crisis

    caused demand to fall for its steel products and its motor vehicles produced under the brand

    name Suzuki. Most of the group’s other companies lost money, including Lion Land. Only two

    of Cheng’s companies remained profitable: the timber operations of Sabah Forest Industries and

    the insurance firm Malaysia British Assurance. Cheng had eventually to go to the CDRC,

    through which he hoped to reach agreement with his more than 100 creditors. He has since been

    forced to sell his stakes in Malaysian British Assurance as well as his corporate headquarters in

    Kuala Lumpur (Malaysian Business 1 January 2001).

Equally hard hit was the Sungei Way Group headed by Jeffrey Cheah. The group is involved in

    property development and construction, the two industries greatly affected by the economic

    downturn. Cheah’s other losses came from his listed firm, Gopeng, and the provisioning for the

    US$110 million Eurobond due in 2001. Cheah sold off some of the Group’s companies, but still

    owns assets such as Sunway Pyramid and Sunway College, which are not part of the listed

    Sunway Group.

    The Resourceful: The third group of Chinese firms are steadily recovering from the crisis without crippling debt or the need to restructure. Some were badly affected, like Tan Chong

    Motors and Oriental Holdings, both in the motor industry which experienced a sharp fall in

    demand. Kuala Lumpur Kepong, a plantation company built by the late Lee Loy Seng but now

    run by his son, is another well-managed firm that was affected by the cyclical fluctuation of

    commodity prices. We also count within this group Chinese businessmen whose public and

    private wealth remains fairly intact despite financial crisis and economic slowdown: Quek Leng

    Cheng of the Hong Leong Group, Lim Goh Tong of the Genting Group, and Teh Hong Piow of

    Public Bank.

    The Winners: A small group of Chinese businessmen came out of the crisis stronger financially. Francis Yeoh of the YTL Group stands out among these. The YTL Group was started by his

    father, Yeoh Tiong Lay, as a construction company and has since diversified into power

    generation. The group has several listed companies, including Taiping Consolidated, and assets

    estimated to be worth RM8.70 billion at current values. The Group owns prime property in

    Kuala Lumpur’s city center, including the JW Marriot Hotel and the shopping complex Lot 10.

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