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