Hong Kong property tycoon Vincent Lo has an estimated net worth of $1.95 billion and is ranked the territory's wealthiest, according to Forbes magazine. But it's not been all plain sailing for the CEO of Shui On. The company came close to the brink during the recent financial crisis, on worries it could not meet debt payments. The property mogul shares with CNBC's Christine Tan, about the difficult period.
Q: You were not immune from the recent financial turmoil. The timing of the credit crunch coincided with the maturity on a 375 million dollar convertible bond and the bank that was supposed to refinance the the funding shut its doors because of the crisis. In all your years of doing business, how difficult a time was it for you?"
A: "I have to say that was the worst experience in my whole business career. And at the time, you know, I have to blame myself in the sense that while we had a very strong balance sheet, we were only 20 percent geared. We had over 2 billion yuan in the bank in the bank, so I was very relaxed about it.
A: Complacent in a way. And also, because this big American bank was promising that they would definitely do the refinancing for us, until Lehman Brothers collapsed, and then we had only a few weeks to come up with that $375 million to repay bondholders.
Q. What have you learnt specifically about crisis management from the crisis?
A: Well, you just have to be prepared for the worst, and you cannot be complacent and you cannot be relaxed about it. And that's why we're putting in place all these reorganizations, and refocus our business game plan, and then the 3-year plan. I want my whole management to adhere to the plan, and make sure that we will be able to face any problems that might come up in the future, which I expect them to, because the whole world is moving so fast.
Q: You’re part of the first wave of Hong Kong developers who dared to venture into the Mainland. In the process you've earned yourself the reputation of being Mr. Guanxi. Have you changed the way you build relationships and connections in China over the last few years?
A: I don’t believe I just wanted to “guanxi”, because I believe that for any long-term relationship it's all about performance. It's all about whether you deliver what you promise, and that to me is the key to any “guanxi” or relationship, and I've always delivered on what I promised. And that is why we've managed to do so much on the Chinese mainland.
Q: You know you're 62 years old. Any plans to retire? What are you doing about succession planning?
A: I don't believe I want to retire, because I just enjoy and love my work so much. But I do recognize that it is important that I have a successor in place, particularly for the CEO position. We have identified somebody who is likely to take over from me, and it's actually an interesting process. I consulted my management staff twice (asking) who they think is the appropriate person to lead the organization. It was very interesting to hear their comments. We have identified one of my colleagues, and I’m grooming him and hopefully he will be in place by (this) year.
This interview is an excerpt from CNBC’s longest-running feature program Managing Asia. Catch the full interview with anchor Christine Tan every weekend on CNBC.