Profile: Beng Seng and Christina Ong: Asian pair sell west, buy east
Amid rumours they face ruin, Singapore's billionaire couple are building a war chest. Hilary Clarke reports
Sunday 29 March 1998
On Thursday, HPL sold all its shares in Donna Karan Japan for $40m (pounds 24m) . On the same day Ong pocketed $22m from the sale of a stake in Manhattan's Hotel Pennsylvania. In February, Ong sold his 50 per cent stake in the Four Seasons Hotel in London to long-standing business partner Prince Alwaleed Bin Talal Abdulaziz Al Saud for an undisclosed sum, believed to be around pounds 45m. He also sold a small stake in Virgin Entertainment Group.
Ever since the start of the Asia crisis last year, Singapore has been awash with rumours that the owner of the ultra-trendy Metropolitan and Halkin hotels in London and his wife Christina Ong, nicknamed "the Queen of Bond Street" because of all the designer franchises she owns there, are going broke.
The recent sales have fuelled the speculation like oil on a fire. Ong is notoriously secretive and media shy. He has given two interviews in 25 years and has not spoken to analysts for eight years. Suspicions of problems were compounded when the tycoon sold his private jet. Then in March, HPL reported a worse- than-expected 27 per cent decline in 1997 profits to $19.5m, partly as a result of losses from his Brashs music retailer in Australia, which he subsequently closed. And finally, like most companies in Asia, HPL's share price has taken a bashing.
The rumours of impending financial disaster at the Ong empire have begun to seep along Bond Street and beyond. There is talk that Club 21, the Ongs' fashion holding company, is about to give up the Armani franchise in this country and has already handed back the UK franchise of Prada to its Italian owners. There have been newspaper reports that the Ongs want to sell the Metropolitan and Halkin. In fact, some analysts and journalists surmised, things were so bad for the Ongs that the Singaporean government was having to indirectly bail them out by buying a stake in a venture to build, along with the UK's Rank Organisation, 12 Hard Rock Beach hotels in Asia, the Carib-bean and Europe.
According to one of Ong Beng Seng's aides, Ong "laughed his head off" at the suggestion that pounds 5m amounted to a state bail-out. Ong is one of South East Asia's shrewdest businessman. This aide maintains Ong is in no financial trouble whatsoever, and in fact when the dust has settled in Asia, will emerge as a beneficiary of the region's financial crisis - one of the few to laugh all the way to the bank.
"He is a trader and always has been," said Robert Earl, chief executive of the star-studded burger chain Planet Hollywood, in which Ong holds stock worth around $250m and is also a director. "He franchises other people's brands and buys and sells them when the time is right. He definitely is not in trouble, but if you are in business in Asia at the moment then cash is king in terms of future opportunities."
Ong, says an aide, is simply engaging in the same strategy he and Christina used when they invaded Bond Street six or seven years ago. Buy when rents and properties are cheap and sell when they are not.
Take the stake in London's Four Seasons Hotel. Ong bought it 14 years ago for pounds 18m. It has given him an average annual return since then of pounds 3.5m He sold it for pounds 45m. The hotel's lease is about to expire. Given the hotel's plush Park Lane location, and the buoyant London property market, that lease will be very expensive to renew.
"With the Ongs, it definitely seems to be more a case of consolidation of their interests at home," said a Singapore based analyst, who did not want to be named.
HPL is definitely on the hunt for hotels in Asia. The company recently formed a joint venture with the Australian developers Raptis to build a two acre-site at Surfers Paradise on the Australia's gold coast. Work is due to start on the development this year.
The group has also let it be known it is on the hunt for hotels in Bangkok and Jakarta.
Despite his canniness, Ong is not a self-made man. He was born into money in Malaysia, moving with his family to Singapore when he was four years old. His first business venture was in shipping insurance where he began to make a fortune.
Then he married into more money. His wife Christina's father, Peter Fu Yun Siak, founded and still heads the Kuo International trading group in Singapore which started off trading in timber and wax before moving into oil.
Ong joined the group in1975 and quickly established himself as a fearless trader. The two men founded HPL together, their first purchase being the Singapore Hilton, now worth an estimated 10 times what they originally paid for it. The mega-bucks started to roll in. Forbes, the US financial magazine estimated Ong's personal wealth to be $720m. It could be a lot more.
Despite his media shy approach and casual image - Ong's uniform is a leather bomber jacket and jeans - he is a glitzy figure in Singapore and abroad. "If Cindy Crawford comes to town then you can be sure it will be Ong that will host the party" said another Singapore analyst. Through his fashion and Planet Hollywood connections, he socialises with a host of celebrities and has made a fortune trading off the names of some of the world's top fashion designers.
He has also managed to gather around him a loyal group of business associates. Robert Earl, who has been a partner of Ong's for 11 years, is one of them. Another is Prince Alwaleed, who recently bought a 3 per cent stake in HPL.
Douglas Ludwig, chief financial officer at Four Seasons Inc in Toronto is another long-time associate. It is perhaps no coincidence that Four Seasons is one of the companies that property developers Canary Riverside Developments is talking to operate a new luxury hotel and apartment development in London's Docklands. Ong is a big investor in the project, which will have a swimming pool running down to the river Thames, along with Canary Wharf Ltd and another state-run Singapore company.
But of the two Christina is really the glamorous one. She is aloof and chic, and the fashion empire came about because she needed something to do, according to Singapore press reports.
She opened her first store in Singapore in 1972. Club 21 now operates Armani stores in London, Sydney, Jakarta and Singapore. According to another Ong aid who dismisses the rumour the company is losing money in London. "Armani is the most lucrative franchise in the fashion business, and the London store made a profit from day one." The Ongs also manufacture and distribute Armani jeans in the US and Asia. Among their numerous other fashion franchises scattered across the globe are Bulgari, Calvin Klein, DKNY, Miu Miu and Guess.
Even so, "fashion for them is just the flower on the smoking jacket" said the business manager of a well-known Bond Street shop.
Of course, there is rarely smoke without some fire. Most of Bond Street has been hit by the strong pound which puts off rich foreigners from snapping up their designer bargains here.
The Ongs' fashion holding company Club 21 is indeed in talks with Prada and may give the franchise back if it conflicts with Ong's plans to expand in Asia, say sources close to the business.
Prada did not respond to calls. Nor did Armani. And while Ong may want to turn his attentions back to his home region, Club 21 has been shedding staff from its numerous fashion franchises there, as the industry suffers from the region's economic slump.
With regard to the sale of the two West End hotels, Ong's aides say he gets offers all the time for the Metropolitan and Halkin, although they doubt if he would sell because they are a pet favourite of Christina's.
Their 22-year-old daughter Melissa likes to party at the Metropolitan's state-of-the-art restaurant Nobu. The couple also have a nine-year-old son Jonathan.
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