Fates of two rich families hold HK hints
Just to illustrate a point about some decisions having huge consequences, I want to share a story about two leading Jewish families from Baghdad who went to China in the 19th century and established their businesses there - namely, the Sassoons and the Kadoories. During the civil war in China,...
Friday, September 04, 2020
Just to illustrate a point about some decisions having huge consequences, I want to share a story about two leading Jewish families from Baghdad who went to China in the 19th century and established their businesses there - namely, the Sassoons and the Kadoories.
During the civil war in China, Victor Sassoon chose to work with Chiang Kai-shek's Kuomintang government.
Elly Kadoorie, his then rival, chose instead to retreat to the then British colony of Hong Kong.
With the defeat of the KMT army, Sassoon fled to London before the communists took over Shanghai.
Both families lost everything there. Today, the only thing left of the Sassoon family in Hong Kong is a road named after them in Pok Fu Lam, whereas the Kadoories, who made the right decision, continue to prosper here, providing electricity to millions.
I understand from reading a fascinating book, published on June 2 entitled Kings of Shanghai and written by Jonathan Kaufman, that the Sassoons are still hoping to be compensated for their loss one day, but that looks unlikely.
The communist government seized immediate control of all companies crucial to the functioning of Shanghai as soon as they entered the city and expelled all foreigners.
Indeed, some foreigners who had big companies there were held hostage until taxes and wages were paid.
Madame Sun Yat Sen played a big role in assisting chairman Mao Zedong, and the Kadoories had to donate Marble Hall to them before leaving for Hong Kong. Marble Hall was Shanghai's largest mansion modeled after the Palace at Versailles.
To compete with the Kadoories' majestic hotel, Sassoon built the Cathay Hotel on the Bund, which still stands today but has been renamed the Peace Hotel.
What these two families had in common was that they were both Jewish and originally from Baghdad.
At the time, the Kadoories had the foresight to invest in a major stake in China Light and Power, the major electricity company in Kowloon. They also own the Peninsula Hotel.
After the war, the Kadoories helped the British rebuild Hong Kong by providing electricity to the many textile factory owners who came down from China, triggering a textile boom.
The family also established Kadoorie Farm in 1956, which helped poor families in the New Territories farm pigs and chicken after the war. It now also has a rescue and rehabilitation program for animals and attracts 3,000 to 5,000 visitors per week. I recommend parents bring their children there.
In 1973, when Deng Xiaoping came to power in China and after US president Richard Nixon's trip there, Lawrence Kadoorie was approached by a Chinese representative to help negotiate the purchase and construction of two reactors for China's first commercial nuclear power station pursuant to Deng's "four modernizations" program.
Kadoorie went on to build the plant at Daya Bay to provide power to Hong Kong and southern China 18 years before the handover.
Deng had the support of then British prime minister Margaret Thatcher, who was pleased with the huge orders placed for electrical equipment with British factories, and on her recommendation, Queen Elizabeth made Kadoorie the baron of Kowloon and Westminster.
Today, the same hard choices have been made by Cathay Pacific and HSBC to stick with China.
How their future will pan out remains to be seen with the unpredictable US President Donald Trump and his arsenal of sanctions. I wish these two British companies the best of luck.
Susan Liang is a lawyer who likes to speak her mind on issues that concern the man on the street