Trailblazer: the life and time of Wang Tseng-hsiang (王增祥, 1926-2012), Taiwanese developer and investor in HK, Japan and the US

November 2, 2020 York Lo Articles, Banks and Finance, Property, Transport

York Lo: Trailblazer: the life and time of Wang Tseng-hsiang (王增祥, 1926-2012),Taiwanese developer and investor in HK, Japan and the US

Left: Wang Tseng-hsiang speaking to the press in HK in the early 2000s; Right: the cover of Wang’s book The Financial Collapse of Japan published in 1998 (Cosmos Books)

A pioneer in the HK real estate industry in the 1950s to 1970s through his Kai Tak Land Investment (啟德置業) and a high profile activist investor in Japan in the 1970s and 1980s through his investment firm Newpis, Taiwanese native Wang Tseng-hsiang had a colorful global business career which started with selling fish in Japan during World War II and included battling the Japanese establishments, hobnobbing with HK real estate billionaires anddeveloping reusable rockets in the US.

Real Estate Development in Hong Kong

Left: Wang Tseng-hsiang in the 1950s (Brazilian immigration record, 1956); Right: Article about the completion of Kai Tak Commercial Building in 1973 (WKYP, 1973-8-6)

Wang was born in Japanese occupied Taiwan in 1926, the eldest of eight children of Wang Chin-chuan (王錦泉), a wealthy landowner and Chien Lien-mei (簡連妹). In 1941, the 15 years old Wang went to study in Japan and graduated with a business degree from the Second College of Commerce (第二商業學校). He started his first business at the age of 18 and made his first fortune in the fish trade in Japan selling fish to the Armybefore relocating to HK at the age of 30 to invest in thereal estate market.

As HK emerged as a tourist destination in the 1950s and there was a scarcity of hotels, Wang established Victoria Park Hotel Ltd(維多利亞花園酒店) in 1957 with registered capital of HK$5 million to develop a hotel of the same name and his HK address was listed as 128 Bonham Strand East at the time. (FEER)He hired John B. Parkin, the largest Canadian architectural design firm at the time, to design the hotel in partnership with new local firm Wong & Ng, founded by Jackson Wong and Ng Chun-men, two classmates from the first cohort of architectural graduates from HKU in 1955. The 240-room hotel on the shores of the Victoria Harbor was expected to be completed by April 1960. (Progressive Architecture, 1959)

In June 1960, Victoria Park Hotel (which was operating out of Room 710 at the Yu To Sang Building in Central at the time) won the bid for a 300,000 sq ft plot of land in San Po Kong (Lot 4391)near the Kai Tak Airport in a government public auction for HK$1.52 million, which was more than double the starting offer of $750,000 and outbidding larger developers such as Harriman Realty. Part of the requirements for winning the bid was the winner need to spend at least HK$1.5 million to develop several industrial buildings of no shorter than 5 stories. (KSDN, 1960-6-28) As a result of this purchase, the firm renamed itself Kai Tak Land Investment Co in January 1961 and over time developed industrial and residential buildings in San Po Kong and Causeway Bay such as Kai Tak Factory Building (啟德工廠大廈) at 99-101 King Fuk Street in San Po Kong which was completed in 1963.

Fire at the Kai Tak Factory Building in 2017

In mid-1972, Kai Tak Land acquired the former site of the Sun Kwong Hotel (see article on Shum Choy-wah) at 317-321 Des Voeux Road Central and built the 22-story Kai Tak Commercial Building which had 130,000 sq ft of office space and projected annual rental income of HK$4-5 mllion for the first year. Another major project at the time was Fok Kwan Building (福群大廈), 3 blocks of residential building at 4-10 Boundary Street in Tai Kok Tsui which had projected profits of HK$10 million when sold (Ruby Restaurant covered earlier bought the ground floor space to open a large Chinese restaurant).

In November 1972, Kai Tak Land went public on the Far East and Kam Ngan stock exchanges through the issuance of 12.5 million new shares at HK$1 per share, PE of 9 times and dividend yield of 8%. The total registered capital of the firm was HK$100 million and the board of the firm included leaders of three major Chinese banks – Chin Sophonpanich (陳弼臣, 1909-1988) of Bangkok Bank and Commercial Bank of HK as chairman, Liu Lit-man (廖烈文, 1929-2015) of Liu Chong Hing Bank as vice chairman and Leung Chik-fun (to be covered) of Kwong On Bank as director. (KSDN, 1972-10-23)

In the late 1970s, Wang shifted his focus to the Japanese market and sold Kai Tak Land to the New World Group in 1976. Initially, New World kept Kai Tak Land’s name which became the holding company for its two hotels in Tsim Sha Tsui waterfront – 100% of New World Hotel and 75% of Regent Hotel (now Intercontinental). (TKP, 1982-12-22). In 1986, Kai Tak Land was renamed New World Hotels (新世界酒店) to reflect its business focus.

Activist Investor in Japan

Article in Fortune magazine about T.H. Wang’s fight with Katakura in Japan in 1983

In the mid-1970s, HK went through a stock market and real estate slump and Wang shifted his focus to Japan, which was experiencing significant economic growth and on its path to world domination in many industries. In 1972, Wang incorporated Newpis Hongkong Ltd (紐比時香港有限公司) to invest in Japanese stocks for his own accounts and on behalf of his business partners such as Cheng Yu-tung of the New World Group.

In the late 1970s, Wang managed to accumulate significant stakes in major Japanese consumer staples stocks such as confectionery leaderMeiji Milk Products, MSG giant Ajinomoto and personal care product giant Kao and also bought 13% of paper manufacturer Oji Seshi (王子製紙) and 19.3% of silk manufacturer Katakura Industries (片倉工業) with proposals to enhance profitability and shareholder value. While Kao’s president wrote back to Wang to thank him as a shareholder and pledged to improve earnings to meet his expectations, he faced significant resistance at Oji and Katakura.

In 1980, he suggested to the management of Katakura that they should sell40 acres of land near its plant in Omiya to reduce its debt to Fuji Bank (10% shareholder of Katakura and Katakura’s president and his two predecessors all worked there) rather than renting it out to a supermarket (Ito-Yokado who was also a shareholder of Katakura) at a reduced rate. When that failed, Wang made a bid to increase his stake to over 25% to force his plans through.Although the Japanese government had removed its restriction of foreign investors owning more than 25% of listed companies in December 1980, when Wang’s partner Cheng Yu-tung applied to acquire 9.9% of Katakura in early 1981, his request was denied on the grounds of national safety. In response,Newpis filed suit in February 1981 against the Japanese government in the Tokyo circuit court. (Fortune, 1983-8-27) This was followed by another suit against Katakura in October 1981 for JPY710 million (HK$18.6 million at the time) over its investments in Japanese government bond in 1973. (KSEN, 1981-10-14)

In September 1983, Wang met with the securities regulator in HK and complained that the Japanese securities firms were not quoting him prices for Katakura over the past month and he also held a press conference announcing his intention to file civil suits against these brokerages. (KSEN, 1983-9-20) Some of the Japanese press painted the picture of Wang as a stock manipulator and labeled his action as greenmail. Ultimately, Wang was forced to sell his stake in Oji to Mitsui and unable to move forward with Katakura despite all his attempts.

In 2007, Wang revealed to the press that he had spent over HK$400 million over the years in legal fees trying to fight the Japanese government over 30 years. In addition to the lawsuits, Wang also wrote at least three books over the years that were highly critical of the Japanese financial system, two of which in Japanese –“Corruption in the Japanese Stock Market” (惡業──證券腐敗的構圖) and “My Fight with Japan Inc.”(與日本有限公司的對決) which was published by TokumaShoten (德間書店) in Japan. In 1998, Wang wrote the Chinese book “The financial Collapse of Japan” (日本金融大崩潰) which was published by Cosmos Book in HK.

Rocket Dreams in the US

Profile of Robert Wang and George Mueller from Kistler Aerospace’s materials

In the late 1990s, Wang Tseng-hsiang along with over a dozen of his tycoon friends from HK such as Cheng Yu-tung, Li Ka-shing, Lee Shau-kee and Ho Tim invested millions into Kistler Aerospace, a Seattle startup chaired by his eldest son Robert Wang (王德義). Robert, who had studied architecture and literature at Boston University and University of Oregon before going into real estate development and investments in Asia and North America, was approached by Kistler founder Walter Kistler (1918-2015) in 1994 to participate in the venture which plan to develop and launch reusable rockets carrying satellites into space at the cost of US$17 million per launch, half the going cost at the time. After Kistler landed George Mueller (1918-2015), the former head of NASA’s manned space programs, as its CEO and hired a strong technical team, Robert joined the firm as chairman in 1995 and helped with fundraising and the business aspects. The venture initially was promising, landing US$100 million contracts from Loral before even the rockets (known as K-1) were built and secured technical and financial support from Northrop Grumman.

Unfortunately, Kistler Aerospace filed for Chapter 11 bankruptcy in July 2003 with liabilities of US$588 million and assets of only $6.2 million despite having raised over US$900 million in funding from US, Asian and Saudi investors. In 2006, Kistler was acquired by competitor Rocketplane and the combined entity Rocketplane Kistler was chosen by NASA along with SpaceX to provide cargo and crew launch services for the International Space Station. Unfortunately, the firm was unable to meet the contract requirements and went bankrupt in 2010 with its assets acquired by others which re-launched it as Kistler Space Systems in 2011.

Over the years, Wang Tseng-hsiang had donated to higher ed institutions such as the Chinese University in HK and in the mid-2000s, he donated valuable land in Taipei he acquired decades before to Taiwan University, making it the largest land donation the University had received up to that point although this was challenged by his seven siblings in Taiwan who had claims to the land as it was registered in the name of their father before his death.

In September 2010, a family friend in Singapore by the name of Cheng Shih-jung filed a lawsuit against Wang Tseng-hsiang seeking HK$41 million claiming that he gave $61 million from his late father’s estate to Wang to manage in 1993 but he was only able to get $20 million back in 1997. The next month (October 2010), the HK court declared that the 84 years old Wang Tseng-hsiang bankrupt after he was unable to repay a HK$5.1 million loan originally issued to him by Asia Commercial Bank (founded by Kai Tak chairman Chin Sophonpanich, by 2010 had become Public Bank) back in 1999. In September 2012, Wang Tseng-hsiang died in Los Angeles at the age of 86.

Sources (other than those cited above):

https://hk.news.appledaily.com/local/daily/article/20100203/13692056

https://tw.news.appledaily.com/headline/daily/20060612/22674088/

http://orientaldaily.on.cc/cnt/finance/20101007/00202_038.html

https://asia.nikkei.com/Business/Markets/Stocks/Fanuc-still-needs-to-work-on-its-listening-skills

http://digitalcollections.library.cmu.edu/awweb/awarchive?type=file&item=486693

https://en.wikipedia.org/wiki/Rocketplane_Kistler

https://www.bizjournals.com/seattle/stories/2003/07/21/story8.html

https://www.latimes.com/archives/la-xpm-1997-sep-11-fi-31014-story.html

http://news.sina.com.cn/china/1999-8-20/7437.html

https://scholar.smu.edu/cgi/viewcontent.cgi?article=2455&context=til

This article was first posted on 2nd November 2020.