Cosco deal will make ex-HK chief and family $1.4b richer

HONG KONG • Former Hong Kong chief executive Tung Chee Hwa and his family will be about US$1 billion (S$1.4 billion) richer with the sale of their container shipping line to Cosco Shipping Holdings.

Mr Tung's personal net worth will increase by about US$400 million to US$2.9 billion, according to the Bloomberg Billionaires Index, based on the US$6.3 billion Cosco offered for his family's Orient Overseas International.

Mr Tung, 80, who was chairman of the business before becoming Hong Kong's first leader during the British handover of sovereignty in 1997, owns 30 per cent of the company.

His younger brother Tung Chee Chen, Orient's chairman and chief executive officer, holds a 39 per cent stake and will boost his wealth by US$600 million to about US$3.8 billion when the deal is completed.

The state-owned shipping giant agreed to pay HK$78.67 (S$13.94) for each Orient share, a 31 per cent premium over last Friday's closing price. The deal still requires approval from regulators and Cosco investors.

Mr Tung, currently a vice-chairman of China's top political advisory body, the Chinese People's Political Consultative Conference, was handpicked by Beijing in 1997 for the top job in the financial hub and has been advising the central leadership on foreign policy, especially China-United States relations.

The Tung family, which founded Orient Overseas Container Line in 1969, ran into financial trouble in the 1980s and needed more than US$100 million in additional funding that was arranged by Mr Henry Fok, a pro-Beijing property tycoon.

Mr Fok, who died in 2006, also played a key role in Beijing's selection of Mr Tung as Hong Kong's first leader under Chinese rule.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 12, 2017, with the headline 'Cosco deal will make ex-HK chief and family $1.4b richer'. Print Edition | Subscribe