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The third-generation scion of one of Hong Kong’s wealthiest dynasties stepped down as chief executive of his family’s property business after New World Development posted its first annual loss in more than two decades.
In a rare management reshuffle, Adrian Cheng on Thursday resigned from the top job at the Hong Kong-listed developer, one of the Chinese territory’s biggest real estate groups founded by his grandfather.
Eric Ma, a former secretary for development of the Hong Kong government and family outsider who was appointed as New World’s chief operating officer in January this year, will be taking over Cheng’s role. Cheng will become a non-executive vice-chair of New World.
“I would like to thank my son Dr Adrian Cheng for his many years of unfaltering support for the group’s business, and his giving back to society while managing the company,” said Cheng’s father Henry Cheng.
“NWD will continue to be managed by a team of professionals. We will also set up a management committee, to support the group’s business development as well as elevate corporate governance standards.”
New World reported its first annual loss since 2004 on Thursday. Hong Kong developers including the Cheng family have been under pressure from the territory’s property slump. China’s economic slowdown has also weighed on the companies.
Cheng’s heir apparent status was cast into doubt last year after his father said he was yet to decide on a successor and might hire from the “outside”.
A former Goldman Sachs and UBS banker, Cheng had taken up senior roles at New World since becoming executive director in 2007 where he shadowed his father and grandfather Cheng Yu-tung, who founded the property business in 1970.
But the 44-year-old has increasingly come under fire over the company’s high leverage and his extravagant projects in recent years, including a $2.6bn mall and office project next to Hong Kong’s airport, and a $1.3bn retail and office complex in Shenzhen.
New World’s market cap has dropped from more than HK$90bn (US$11.5bn) in 2020 to HK$20bn today.
The Cheng family also controls Chow Tai Fook Jewellery, one of China’s biggest jewellery retailers, as well as Rosewood hotels and an energy business in Australia through its family office Chow Tai Fook Enterprises. Henry, who chairs the family’s key businesses, has a net worth of $19bn, according to Bloomberg’s billionaires index.
Brian Cheng, Cheng’s brother and co-chief executive of the family infrastructure and insurance business NWS Holdings, said their father Henry was “fair” in response to a question about Cheng on Wednesday.
“Even for me, if I don’t perform well, it would be normal that I get replaced,” he said.
https://www.ft.com/content/0aa4fbcb-eaf9-4f12-85f4-df6b4b1c4b3b
