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China’s wealthiest man considers picking a successor, but his only son may miss out

Wanda Group chairman Wang Jianlin attends the press conference of 2017 Gree China Cup International Football Championship on December 7, 2016 in Beijing, China.
VCG | Getty Images
Wanda Group chairman Wang Jianlin attends the press conference of 2017 Gree China Cup International Football Championship on December 7, 2016 in Beijing, China.

Wang Jianlin may be ready to hand over the reins of his 634 billion yuan (HK$712 billion) business empire – spanning from shopping centers, theme parks and sports clubs to cinemas – to a successor, but his only son may not be the one.

The founder and chairman of Dalian Wanda Group said he was most likely to pick a professional manager to take over the running of his business, according to a speech he made at an entrepreneurs summit at the weekend.

"I have asked my son about the succession plan, and he said he does not want to live a life like mine," said Wang, according to a transcript of his speech on Wanda's website.

"Perhaps young people have their own quests and priorities. Probably it will be better to hand over to professional managers and have us sit on the board and see them run the company."

The scions of China's billionaire entrepreneurs are increasingly striking different paths, as more than three decades of breakneck economic growth and overseas education have given them experiences, world view and aspirations different from their parents'.

More than 80 per cent of Chinese heirs are not keen on taking the reins of their parents' businesses, according to a survey by Shanghai Jiaotong University, covering 182 of the country's top family-run companies.

Some were backing off due to intense pressures, while others simply were pursuing other career interests, another study by an association of private enterprises in the mainland showed.

Wanda, founded in Dalian in 1988, is the epitome of the country's rags-to-riches story. It grew from a small property developer into a conglomerate operating malls, hotels, theme parks and the world's largest chain of cinemas. In the process, it made Wang and his son immensely wealthy.

Following a worldwide buying spree that added AMC Entertainment Holdings, Hoyts Group and Odeon & UCI Cinemas Group, Wanda now operates the world's largest chain of cinemas, with more than 10,000 screens. It also owns hotels run by Westin and Sofitel, as well as shopping malls.

After snapping up stakes in European football clubs, Wanda is now turning its sights on Hollywood, announcing plans to buy Dick Clark Productions that granted it the broadcasting rights to Golden Globe Awards.

Wang, 62, also struck a more conciliatory note in his weekend speech. While he had previously disparaged Walt Disney's Shanghai theme park and predicted it would not turn a profit for 10 to 20 years, he back-pedalled on his remarks, saying he had "already gotten reconciled with Disney," after visiting the company's head office in Burbank, California.

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"I think Disney would become the biggest-grossing studio in the world this year," he said. "Virtually all of its seven to eight releases every year were blockbusters."

Wang Sicong, who turns 29 next month, is a director of his father's conglomerate, owning a 2 per cent stake worth 12.7 billion yuan.

He had his early schooling in Britain, studying philosophy at the University College London.

Armed with 500 million yuan of his father's seed capital, Wang Sicong founded Prometheus Capital in 2011, naming his private equity fund after the Greek titan who stole fire from Mount Olympus to give to humanity.

He has been pouring capital to catch a slice of the mainland's booming internet entertainment, gaming and social networking industries, with investments in Invictus Gaming, a professional eSports gaming team, and Hong Kong-listed Dining Concepts Holdings, which operates the BLT Burger chain.

As of August, Wang's 9.98 per cent stake in Dining Concepts was valued at HK$80.9 million, according to exchange filings.

The younger Wang is a household name in the mainland, dubbed "the people's husband" for his status as one of the most eligible bachelors. He is an internet celebrity, with 21 million followers on his Weibo account, the Chinese equivalent of Twitter.

Even as his family business operates the world's largest chain of cinemas, Wang Sicong has not avoided internet squabbles with film stars and celebrities, with the country's highest-paid actress Fan Bingbing and one of the best-known directors, Feng Xiaogang, on the sharp end of his blogs.

Since early this month, the Wanda scion and Feng had been embroiled in a public spat over the scheduling of the film I Am Not Madame Bovary, the Chinese-language satire which won Feng the best director's award and Fan the best actress' award at the San Sebastian Film Festival in Spain.

Both Wangs could not be reached for comment.

A number of the mainland's richest self-created billionaires, mostly in their 60s and 70s, have already passed their torch to their millennial heirs and heiresses who had held senior management positions in their businesses for many years.

Zong Qinghou, the country's richest man in 2012, appointed his only daughter Kelly Zong, 34, as the chief executive of beverage giant Wahaha, while Liu Chang, 36, took the reins from his father Liu Yonghao in 2013 as the chief executive of agribusiness New Hope Liuhe.

"We have several professional managers as candidates," Wang said at the weekend.

Antoinette Hoon, a partner with PwC, said her firm's recent research found entrepreneurs tended to have a tough time determining whether they should prioritise the interests of their business or family.

"If the entrepreneur leaves family members in charge, they could cash out at any time," she said. "However, there is also a risk of family feuds that only increases with each new generation."

"On the other hand, setting up a family office to shield the business from family interests limits their control and their share of any dividends."

"We have several professional managers as candidates," Wang said over the weekend. "The one who is handpicked and later trained to be a business leader should be no better than those who manage to stand out of the others through competition," he said.

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