HONG KONG -- The day after Li Ka-shing's retirement as chairman of his two flagship companies, CK Hutchison Holdings and CK Asset Holdings, major Hong Kong newspapers splashed the same full-page color advertisement on their front pages. In the notice, adorned in celebratory red and with an illustration of Li's familiar black-rimmed eyeglasses, a group of unnamed shareholders vowed "eternal support" for the Hong Kong tycoon and to "full-heartedly congratulate" his "glorious retirement."
The ad on May 11 appeared in at least six Chinese-language newspapers, with a political spectrum ranging from liberal to pro-mainland China. While it is not unusual for Hong Kong newspapers to run front-page ads promoting new luxury residential buildings, notices carrying personal messages are rare.
The ads, along with heavy local news coverage on Li and his retirement -- from a video of his daily morning stretch at home to the tidbit about his 1,000 Hong Kong dollar ($127) tip to the doorman at the group's shareholders' meeting venue -- stood as testimony and a reminder of how much the charismatic Li, known as "Superman" for his legendary business acumen, meant to the local economy, businesses and the community at large.
The big question facing Li's business empire now is what to expect after the 89-year-old tycoon has stepped down -- although he will continue to serve as senior advisor -- after nearly seven decades since he founded Cheung Kong Industries in 1950 to make plastic flowers and toys.
The baton has been passed to his eldest son, Victor Li Tzar-kuoi, 53, who inherited his father's positions as chairman of both companies. Investors took note of what Li Ka-shing said on the day he retired: "Victor has followed me for more than 30 years, and he should do well. I believe Victor will do the job."
Indeed, even though the news of Victor Li succeeding his father -- rather than Li Ka-shing's second son, the entrepreneur Richard Li Tzar-kai, 51 -- came by way of an official announcement in 2012, the elder Li had infused his skills to his son over a much longer period.
In 1985, after earning a master's degree in civil engineering from Stanford University in California, Victor Li joined Cheung Kong Holdings, a flagship company established by his father in 1971. Victor Li was named deputy managing director in 1993 and promoted to managing director in 1999, and doubling as deputy chairman since 1994. At Hutchison Whampoa, another flagship company that was acquired by his father in 1979, Victor Li joined its board in 1995 and became deputy chairman in 1999.
After the functions and ownership structures of those two companies were streamlined in 2015 and transformed into CK Asset, which runs the property business, and CK Hutchison, which subsumed the nonproperty businesses, Victor Li took on the roles of deputy chairman and managing director for both. In addition, he has already been serving as chairman for the group's Hong Kong-listed arms, CK Infrastructure Holdings and CK Life Sciences International Holdings.
Michael Kadoorie, an independent director at CK Hutchison since 1995, including its precursor Hutchison Whampoa, told reporters the day before Li Ka-shing's retirement: "I wouldn't want to make any comments on what his family preparations are, but I am sure they are more than adequate."
Kadoorie, 76, is the third-generation patriarch of his family-controlled businesses: CLP Holdings, a regional power company, where he serves as chairman, and Hongkong and Shanghai Hotels, operator of the Peninsula Hotels, where he also is chairman. Kadoorie recently launched his own succession plan. His 26-year-old son Philip Kadoorie joined the board of the hotel company last December, when the elder Kadoorie expressed hope for a "smooth transition from one generation to another."
While Victor Li is the man at the helm of CK Hutchison and CK Asset, there is another key figure in the succession plan: Canning Fok Kin-ning, 66, who joined Hutchison Whampoa's board in 1984 and became a Cheung Kong Holdings director in 1985.
Fok, an accredited accountant, first gained a position at the group about four decades ago, by directly writing to Li Ka-shing. His work style and reputation as a tough negotiator quickly pushed him through the ranks, according to earlier reports, and he was appointed managing director of Hutchison Whampoa in 1993. Since then, he has been considered Li Ka-shing's top confidant.
Even after the elder Li stepped down, Fok has remained as the group's linchpin, particularly for the nonproperty businesses. At CK Asset, Victor Li's uncle, Kam Hing-lam, 71, will assist the new chief as deputy managing director, among other long-term lieutenants of the elder Li, but Fok's role carries weight.
A day before the succession, Victor Li, who is known for having a more reserved demeanor than his father or brother, replied to a reporter's question about his preparedness: "I hope to cooperate with Canning Fok for years to come."
Fok and Victor Li remain as co-managing directors of CK Hutchison and co-chairmen of the group's Canadian oil and gas subsidiary, Husky Energy. Meanwhile, Fok serves as deputy chairman of CK Infrastructure, a unit in charge of global expansion in infrastructure operations in Europe, Australia and Canada, while diluting its portfolio in Hong Kong and mainland China in recent years. Fok also is chairman of its telecommunications subsidiaries and the Singapore-listed port operation trust.
What Victor Li inherited is a global business empire with over 300,000 employees and spanning more than 50 countries. The two conglomerates' combined revenue last year was HK$478 billion, while net profit attributable to shareholders was HK$65 billion. That is likely the reason why Fok, who has been at the forefront of important events for the group, has remained even after Li Ka-shing's retirement.
One such event came in the form of a reorganization of the two flagship companies in 2015. It was Fok who led the reshuffling to untangle a complex business structure and lessen the chance of the group being discounted by investors, as it was in the previous structure when Hutchison Whampoa was a 49.9%-owned subsidiary of Cheung Kong Holdings, while the real-estate business was scattered among both entities.
"As we develop our businesses, each of them will become more transparent and investors would be able to value those as they see it more clearly," Fok said at the time of the deal, which paved the way for this month's succession.
Two major divestment deals in telecom were also Fok's doings. The sale of the group's 44.81% stake in Orange to the now-defunct German conglomerate Mannesmann for $14.6 billion in cash, notes and shares in 1999 provided $15.1 billion in profit. In 2007, the group's 67% share in Hutchison Essar in India was sold to Vodafone Group of the U.K. for $11.1 billion, bringing further ammunition into its arsenal for investments elsewhere.
Fok also serves as the de facto top spokesperson for the group, especially with controversial issues.
In April 2013, when a strike by the company's dock workers led to a boycott of its retail businesses, Fok struck back. He criticized the union for blocking his "very reasonable" plan to resolve the issue, while claiming that the strikers and their supporters were "resorting to Cultural Revolution-style behavior to interfere with our colleagues."
The 40-day strike included demonstrations, demonizing mock-up figures of Li Ka-shing and slogans claiming inferior working conditions in front of the company's headquarters in Hong Kong's Central business district. The strike -- the longest industrial action in the territory since the 1997 handover from Britain to China -- was eventually settled with a 9.8% pay increase.
A decade earlier, Fok took a high-profile role in a battle between Li Ka-shing and Gordon Wu Ying-sheung, founder and chairman of infrastructure and property developer Hopewell Holdings, over a proposed bridge connecting Hong Kong with Macau, 60 kilometers to the west, and Zhuhai, a border city in Guangdong Province. As the spat between the two tycoons heated up, Fok openly picked a fight with Wu on behalf of his boss to protect the company's business interests.
Fok was quoted in 2002 as saying, "We are not opposed to building the bridge as it is funded by private industry. We, however, oppose the idea of sacrificing the interest of one of the most important industries in Hong Kong, which is the container terminal industry to subsidize a private investment." The container port operation is one of the group's major breadwinners. The quarrel eventually ended and the bridge, now under construction, will open this year.
Fok is highly regarded as a special figure within financial markets, and the group's sense of stability and continuity stems from him.
Gloria Tsuen, senior analyst at Moody's Investors Service in Hong Kong, said it is difficult to find someone else like him at other companies. "There are some similar, but not to that degree, not to that prominence," she said. "The person that we think of after Li Ka-shing is Canning Fok."
With his unique position in the group and for his contributions over the years, Fok has been heavily rewarded. As one of the best-paid executives in Hong Kong, he is known locally as the "king of the working class." According to local reports and company disclosures, his annual compensation has been over HK$100 million since 1999, growing to HK$210 million last year, including fees, salaries and bonuses. His pay check is greater than Victor Li's -- his compensation last year from CK Hutchison and CK Asset was HK$190 million.
Fok's wealth has allowed him to afford an exclusive address. He purchased his home, located in the same upscale neighborhood as Li Ka-shing and dubbed the "Palace of Versailles of Hong Kong," for a reported HK$350 million in 2006 and which Forbes rated the second-most expensive home in Asia the following year.
A spokesperson for the group said Victor Li and Fok were unavailable to comment for this article.
Stewart Leung Chi-kin, vice chairman of conglomerate Wheelock, believes the two men are ready to strike out on their own. "I know them really well, and they are capable," the 79-year-old industry veteran told the Nikkei Asian Review. "They are not just joining the company [for the] first [time this] year. They have been joining the family business for so long." Before starting at Wheelock in 2012, Leung worked for another family conglomerate, New World Development, and has witnessed generational transitions from the inside.
Still, clouds hover on the horizon for the two flagship companies. Along with a greater competitive global environment, the new top management will have to confront disparity issues, which are mounting in Hong Kong's free-wheeling economy -- and CK Hutchison is a frequent target.
According to research by the Hong Kong Confederation of Trade Unions released just before the May Day holiday, the income disparity between corporate bosses and frontline workers in the city is widening, especially at CK Hutchison. The salary gap between Fok, the company's highest paid person, and a clerk in the group's PARKnSHOP supermarket is 1,462 times. "That means a grass-roots worker has to work 1,400 years -- from the Tang Dynasty until now -- to earn the amount of money that [Fok] earns in a year," Lee Cheuk-yan, general secretary of the union and a former lawmaker, told local media.
Despite reassuring comments from the group and others, the share prices of CK Hutchison and CK Asset have fallen 10% and 4.4%, respectively, as of May 17 since the announcement of Li's retirement on March 16, underperforming the Hang Seng Index's 1.8% decline.
"Succession is the most vulnerable time for family businesses," noted Joseph P.H. Fan, professor at the Chinese University of Hong Kong and a prominent scholar in family businesses.