2015-01-19

Li Ka-shing Falls Out of Favor in Beijing

People who want to read into things have read plenty into Li Ka-shing's latest moves.

SCMP:From 'superman' to 'big tiger', Li Ka-shing loses favour with Beijing
A signed commentary by a mainland columnist who described Li as a "big tiger in the property market" was published on Sina.com, China's top portal, and went viral on mainland social media. Those who follow Chinese politics will know "big tiger" is a term that became popular since Xi Jinping took power and began a nationwide anti-corruption drive against top-level corrupt officials and businessmen.

Those recently labelled "big tigers" include former security tsar Zhou Yongkang and Ling Jihua, a former top aide of ex-president Hu Jintao.

I won't list all the anti-Li articles that appeared in mainland media last week, but to me it is very clear that the propaganda officials have changed their minds and will no longer help boost the image of Li by calling him what they have for decades - "superman".

If it was just one or two articles complaining about Li's exit, then he may have little to worry about. But from Global Times to Sina, it looks more like a well-organised media campaign to announce the end of an era. If Li doesn't need China any more, Beijing doesn't need to rely on Li alone for Hong Kong affairs. Indeed, one era is over.

SCMP: How Li Ka-shing killed three birds with one restructuring
Li Ka-shing has once again proven himself as the top dealmaker, killing three birds with one stone.

In a nutshell, the deal is about pouring the assets of Cheung Kong (Holdings) and Hutchison Whampoa into a bowl and then divvying them up into a property and a non-property company.

...Instead, the current proposal involves the creation of a holding company that entails the removal of a listed company and a spin-off. That, in turn, requires not just shareholders' approval but also that of the courts.

The question is, why take the long route?

The answer is, an asset swap would not achieve the purpose of moving Li empire's incorporation away from Hong Kong and getting the extra protection as a "foreign company".

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