Brothers: Knitwear Pioneer Yap Chuin-siu and Financier Simon Yip
York Lo: Brothers: Knitwear Pioneer Yap Chuin-siu and Financier Simon Yip
In the 1960s to 1980s, Yap Chuin-siu and his brother Simon Yip were prominent figures in the HK business scene as the earlier was the founder of Rose Knitting, a leading listed knitwear manufacturer and the latter a high-profile financier with large investments in the Dominican Republic who was a key figure in the collapse of the Overseas Trust Bank in 1985.
Yap Chuin-siu (葉椿壽) and Rose Knitting (玫瑰針織)
Yap Chuin-siu (second from left) and Yeung Ting-wah (first from left) from Rose Knitting at Kai Tak before boarding their Lufthansa flight to Tokyo (WKYP, 1963-5-23)
The Yap brothers hailed from Amoy (Xiamen) in Fukien province and were related to the Chung family, the kings of industrial buildings profiled earlier in the articles about E.Wah Aik San and Wah Yuen as their sister Yip Wing-Wah (葉榮華) was the wife of Chung Ming-fai while Simon’s son Bernard Yip Se-wing (葉思榮) also married one of his Chung cousins.
Yap Chuin-siu founded Rose Knitting to manufacture high end knitwear in 1959 although as a firm it was not incorporated until September 1960. A key executive in the early years was Yeung Ting-wah (楊定華) who was manager of the firm and Yap’s wife Yim Wan-chi (嚴韻芝) and younger brother Simon Yip were also involved with the firm.
From the beginning, Rose focused on the export market, specifically Western Europe and had significant share in terms of HK knitwear export to the West German market. By the late 1960s, revenues had exceeded HK$12 million and the firm was able to acquire new machinery using cash in 1967 to automate its production line. By 1971, the firm’s sales exceeded HK$14 million with 400 full time staff and 500 outside contractors and had also expanded into the North American market.
Capitalizing on the stock market boom at the time, Rose Knitting went public in late 1972 on the Kowloon Stock Exchange, the first industrial stock to do so (The Kowloon exchange was the weakest of the three at the time and most of its listed companies were small property companies or “concept” stocks such as HK Antenna, the most notorious penny stock in HK history to be covered later). To raise the company’s profile, Yap recruited two prominent Chinese bankers – P.T. Huo (霍寶材), the chairman of Bank of Canton as the chairman of the firm and Huang Tiong-chan (黃長贊), then deputy managing director of Overseas Trust Bank (later chairman) to join the board. The IPO involved issuance of 2 million new shares at HK$1 apiece, 55% of which sold to the public, 35% to members of Kowloon Stock Exchange and remaining 10% to employees of the firm. The expected profits that year was HK$700,000 and the IPO was priced at 8.57 times PE and was two times oversubscribed. (WKYP, 1972-11-22)
Relative to his brother, Yap maintained a lower profile and only served one term as a director of Po Leung Kuk in 1977-78, the same year as the heads of two banks which the brothers were closely affiliated with – Cheng Eng-kuan (莊榮坤,chairman of PLK that year, brother of Filipino Chinese tycoon Johnny Cheng) of Hang Lung Bank and Patrick Chang Chen-tsong (張承忠) of Overseas Trust Bank (son of OTB founder Chang Ming-thien). Relative to others who had lengthy bios, Yap’s bio only list that he was a native of Amoy and head of Rose Knitting.
Article about Rose Knitting’s listing on the Kowloon Stock Exchange in 1972 (WKYP, 1972-11-1)
In 1987, Rose Knitting issued 300,000 new issues at $3.40 per share to Chuang’s Consortium (see article on cutlery), representing 4.5% of the firm’s outstanding shares. (TKP, 1987-5-30) In 1989 there were plans to open a factory in Dongguan but was abandoned. In 1990, the Yap family sold the listed shell of Rose Knitting which was later renamed Chesterfield Ltd and retained the knitwear business which was organized under Rose Knitting Asia Ltd.
Under the leadership of Yap Chuin-siu’s son Michael Yap (葉子盛), Rose Knitting Asia continued to grow and was the first firm to submit trade document electronically to the HK government via Tradelink in 1997.
Simon Yip (葉椿齡) and Dominican Finance (多明尼加財務)
Simon Yip (left) and his co-conspirator Huang Tiong-chen in the OTB scandal (TKP, 1986-5-4)
According to his entry in the Who’s Who In Hong Kong edited by Kevin Sinclair in 1984, Simon Yip graduated from Amoy First Municipal High School in 1945 and National Chi Nan University in 1947. He started his career as an exchange dealer for Wah Yuen Co in 1949 and founded HK Wah Wai Foodstuff Co Ltd (華偉食品) in 1957 (although it was not incorporated until 1965; dissolved in 1991) and Chung Hwa Enterprise Co (祟華企業) in 1960. Little information is available about these two enterprises.
Hotel El Embajador in Dominican Republic which was owned by Simon Yip
In the 1970s, Simon Yip shifted his focus to finance and the Caribbean island of Dominican Republic, where he first visited in 1974. A haven for wealthy exiles with its open immigration policy, Yip was immediately drawn to the business potential of the island and was made honorary consul of Dominican Republic in Hong Kong the next year.
In 1974, Yip formed Pan Allied Consortium (泛寶來國際集團) which gained control of a small listed property developer Mercantile Foundation Ltd (銓利基業) and Yip became its chairman and managing director. Through Mercantile, Yip acquired Corporation Intercontinental de Hoteles (Dominicana) CpA which owned the El Ambajador Intercontinental Hotel (“Ambassador Hotel”) in Santo Domingo in Dominican Republic, one of the largest hotels/casinos on the island at the time in 1976. To attract foreign capital, the Dominican government issued passports to foreigners who invest in Dominican properties and Yip developed a residential project called Ambassador Garden with flats starting at US$70,000 which he promoted to the HK public in 1978. As Dominican Republic did not have extradition treaties with many jurisdictions including HK, Yip emphasized at the press conference that the government would only issue passports to HK resident with clean records but nevertheless over time many shadowy figures ended in Dominican Republic including former corrupt HK police sergeants and criminal figures. (KSEN, 1978-4-11) To attract HK tourists and immigrants, Yip opened the Cantonese restaurant Jardin de Jade (“Jade Garden”) at El Embajador, which he boasted to be the best Chinese restaurant in the Caribbean.
He also established a deposit taking firm by the name of Dominican Finance (incorporated in 1979) in Hong Kong to facilitate the immigration scheme. Other shareholders of Dominican Finance include his relatives Dennis Yip Chi-moun and Francis Yip Chi-fui (葉子輝, Married niece of CITIC Group founder Rong Yiren)
In June 1981, Simon Yip made the headlines across the Pacific when he acquired the Commercial Bank of San Francisco for US$10 million. (TKP, 1981-6-10) At the time the Bank had US$51 million in assets. However, the California Superintendent of Banks imposed conditions on the deal which Yip objected and ultimately the transaction was terminated in March 1982.
As it turned out, the motivation behind Yip’s interest in acquiring a bank in the US was to facilitate a massive check kiting scheme he had been running since 1979 through Dominican Finance and Chung Hwa Enterprise in collaboration with the senior management of Overseas Trust Bank (海外信託銀行) such as Rose Knitting director Huang Tiong-chan to fund his speculation in the volatile bullion market. At the time, OTB was one of the largest banking groups in HK with 62 branches and over HK$30 billion in deposits. The scheme collapsed in March 1982 when Yip failed to cover checks totaling over US$66.8 million. Instead of reporting the losses which could have resulted in the bank’s closure, OTB management decided to cover up the scheme. By the time OTB and Dominican Finance finally collapsed in June 1985, the total liabilities associated with Yip’s activities exceeded US$89.5 million.
In May 1986, Yip was arrested in San Francisco and extradited back to HK. He was charged with 46 counts of conspiracy, false accounting and deception and was sentenced to 8 years in prison. Ultimately the HK government spent HK$4 billion to rescue OTB which was later sold to the Guoco Group.
Sources other than those cited above:
This article was first posted on 12th August 2019.
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