| BUSINESSWEEK ONLINE : APRIL 26, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
Bad Blood: China and the Keswicks (int'l edition) The Chinese have plenty to dislike about the Keswicks. William Jardine, co-founder of Jardine Matheson Holdings Ltd. and a distant ancestor of reigning patriarch Henry Keswick, grew rich in the Chinese opium trade. He urged Britain into the Opium Wars--and suggested taking Hong Kong and its superb harbor as a war prize. Bad blood has flowed liberally between the Chinese and the Keswicks ever since. But once again, Hong Kong and China offer the ''princely hong'' its best growth prospects. They produced the bulk of Jardine's $190 million earnings last year. Left to Henry Keswick, 60, the rift between the company and China might have been irreparable. He angered Beijing by moving the group's legal domicile to Bermuda in 1984, when Britain agreed to return Hong Kong to China. His public outbursts against Beijing made matters worse. The current taipan, Alasdair Morrison, who is not a member of the Keswick clan, has repaired some of the damage. In 1995, Morrison called it ''a matter of regret'' that ''some of Jardine's actions have caused offense in China.'' Although the Keswicks own just 4.9% of the holding company, intricate cross-shareholdings make hostile takeovers all but impossible. Jardine took its shares off the Hong Kong exchange in 1995 and moved trading to Singapore, which accepted the stringent terms of Bermuda's antitakeover code. So Hong Kong's biggest employer after the government is controlled by two brothers who live in London and own little stock. The Keswicks have made management blunders. Overborrowing and overspending brought the group to its knees in the 1980s. Links with a real estate company that became Hong Kong's biggest corporate collapse ever also cost dearly. A 1987 deal to take a 20% stake in Bear, Stearns & Co. fell apart, costing Jardine more than $50 million. So the Keswicks--Henry and his younger brother Simon--must become, or at least hire, competent executives. Otherwise, they risk frittering away one of Asia's great corporate empires. By Mark L. Clifford in Hong Kong _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 The Taipan's Last Chance (int'l edition) ASIAN COVER IMAGE: The Taipan's Last Chance TABLE: Morrison's Mission TABLE: Jardine's Holdings Make It a Key Asian Player CHART: Jardine's Poor Showing INTERACT E-Mail to Business Week Online | |||
