On Your Own

The writer is an entrepreneur who hopes to share his experience and insights with readers who want to take that giant leap into business but are not sure if they should.

8/2018 – My wish list to the entrepreneurs

Saturday, 26 May 2018

Dear entrepreneurs

This past general election must have surprised you with such an unexpected twist that you are unprepared for the rapid changes in government policies. If you want to forecast the next steps to be taken by the Pakatan Harapan government, I suggest you read up their election manifesto.

Surprisingly, this motley crew of politicians are able to work together, counter check one another and following the manifesto that they have promised to the last word. Even Tun Dr Mahathir Mohamad has to retract some of his earlier decisions in the spirit of the manifesto.

However don’t raise your hopes too high for these are early days.

Saudara Anthony Loke has changed the meaning of the YB acronym from Yang Berhormat to Yang Berkhidmat. No decorum please. Now everybody can get a driving licence. If you pass. Saudara Maszlee Malik will be reforming our education system with new refreshing ideas so hopefully it will be well received by the professors, lecturers and the teachers. Implementation will be his toughest task though not impossible.

Entrepreneurs who believe that honorific titles will get you respect in the government departments will be in for a surprise with these motley crew of saudara ministers. Save your money and reinvest in growing your company capabilities instead.

Entrepreneurs who have been getting negotiated contracts from the previous government should revisit your one sided contracts and understand the rules of the law when the government comes a calling to renegotiate with you. Be prepared for a haircut.

Entrepreneurs who have openly supported Barisan Nasional in the previous elections should not worry too much as this Pakatan government believes in freedom of speech, freedom of rights and freedom to choose and vote. However general public sentiments are against you so it might be advisable to keep quiet for now rather than making a bad situation worse.

Entrepreneurs who controls public listed companies should refrain from being openly involved in politics. You have a responsibility towards the other stakeholders in your company. Your personal choice in supporting the government of the day or the next government should not jeopardise the fortunes of your listed company.

Just as politicians should not be involved in business, businessmen should not be involved directly in politics. The recent dramatic saga of Tan Sri Stanley Thai and Tan Sri Tony Fernandes have been well documented, discussed and gone viral. It will eventually be a good case study for topics on leadership governance and managing government bullies. As said by Tan Sri Rafidah Aziz, let’s bury these past cases and move on for we have much to look forward to.

Hopefully this new government will not set the Inland Revenue Department onto the businessman who has not supported them in the last election.

While it seems unlikely, there is no indication of any changes in the IRD by the Finance Minister, probably because they have the 1MDB debacle to unravel on an urgent basis.

Saudara LGE, the entrepreneurs are urging you to reform the IRD to be more compassionate, less arrogant and more fair. Please do not set them KPI’s on excess tax collection as the officers will start believing in creative accounting of their own imagination. Dr Mahathir has asked the IRD to pay back the excess tax created and collected from many individuals and corporations. It will be interesting to see what the IRD will do with his instructions.

Bumiputra entrepreneurs should not worry too much as to the loss of business opportunities with the government. The Pakatan government has pledged to maintain certain rights for bumiputra business community. The only difference will be no more negotiated contracts, all on open tender and please make sure you perform or your performance bonds will be taken by the government.

Many associations like the taxi associations are approaching Dr Mahathir and the new ministers for clearer policies or additional regulations to be applied to the digital competitors.

No matter what new regulations there is, this can only be short-term breathing space for the taxi operators.

Only a complete overhaul in attitude and business model can help the taxi players survive in the long run. The consumers decide their future, not the government.

For entrepreneurs who are involved in the import, distribution and retail of China made consumer products, apparels, electronic products and accessories, I strongly suggest you guys have a quick discussion with our Economic Affairs Minister and Human Resources Minister. With the rolling out of the Digital Free Trade Zone, Alibaba will be flooding China-made products into Malaysia. Are you guys prepared for the onslaught?

I recommend a quick national survey to be done by the Human Resources Ministry on how many people will be affected or displaced by this digital e-commerce disruption. The ministry should plan a re-training programme for these displaced workers and work on re-routing these workers to other industries.

Dr Mahathir has said that this Pakatan government will be business friendly. I hope the civil service especially the IRD will transform itself to be business friendly too. Entrepreneurs who enjoy a lower cost of doing business due to government efficiency should pass the cost savings to their customers.

This Pakatan government has promised to lower the cost of living for all Malaysians in their manifesto. No unintelligent remarks yet from their ministers. So far so good.

Published: https://www.thestar.com.my/business/business-news/2018/05/26/my-wish-list-to-the-entrepreneurs/

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7/2018 – My wishlist to Dr Mahathir and Guan Eng

Dear Dr Mahathir

It is difficult to congratulate you for your self appointment as the next Education Minister. Not especially with Tun Dr Siti Hasmah Mohd Ali being unhappy that you have broken your promise not to take up an additional portfolio as you already have the heavy job of a Prime Minister. You have hardly slept the past week and the nation is worried about your health.

So with it with great relief that you have decided to pass the baton to Dr Maszlee Malik before the starting line. Neverthless, many are pleased that you have thought about it as the future of this country rests upon your wise decision and a firm hand.

As you have combined the two education ministries into one, you can now chart a seamless education for a child from standard one to university. Re your online software lessons, it will open up content possibilities different from the dreary textbooks. Digital technology will enable scaling in terms of different subjects, multiple age groups and in different languages. It will open up the young minds.

However please ban political themes in primary and secondary schools. Reintroduce Rukunegara and moral teachings. Mastering science, maths and English will enhance personal intellect.

Religious indoctrination should be put aside while teachers and lecturers should stay religion neutral. All academic disciplines in universities should be recalibrated to produce graduates with the right skills to be hungry and job ready.

I do have one wish. Please set up a Council of Eminent Historians. Yes they say History is written by Victors but this was because in those days, it was difficult to archive manuscripts. But our history is young, we have computers and gigabytes of storage memory. And the Council should review all the history books in schools and replace the fake facts with true facts

The future belongs to those who learn from the past and live brilliantly.

Those who cannot learn from history are doomed to repeat it. Hopefully our recent bad chapter in history will never be repeated.

What’s done is done. Right actions in the future are the best apologies for bad actions in the past.

Anyway Tun, you will always be remembered in our history as the PM who came in from the past to save our future. And may God bless you with many more healthy years.

Dear Lim Guan Eng

Congratulations for being appointed as the Finance Minister-designate. According to Datuk Seri Anwar Ibrahim in his homecoming speech on Wednesday, as a past Finance Minister, he found the job to be difficult and complex.

Maybe that is why you were picked for the job. When the country is having a major cash flow problem, it is time to pick a prudent Malaysian accountant to helm the Ministry.

That Tun Dr Mahathir Mohamad picked you for this post, he must have had tremendous confidence in your ability and your integrity. You yourself have had meetings with the Ministry officials in the last few days and discovered that the problems in the Ministry especially the 1MDB debts are deeper and wider than expected.

But financial debt is not your only problem. In an article by Digital News Asia just two days ago, the former secretary-general Tan Sri Serigar Irwan was described as the pillar of the startup ecosystem in Malaysia. Besides being the Board Chairman of Malaysian Global Innovation and Creativity Centre (MaGIC), his contribution, support and commitment towards the startup ecosystem has not been matched by any senior civil servant.

Well this is all admirable as Malaysia moves into the digital technology space, one wonder why MaGIC (MoF Incorporated) is under the purview of Finance Ministry and not under the Science, Technology & Innovation Ministry? It is akin to Maybank CEO appointing his chief financial officer to be in charge of its Innovation Lab when a chief innovation officer has already been employed.

Similarly Malaysia Digital Economy Corporation (MDEC) another MoF incorporated company is under the purview of your Finance Ministry.

You will be pleased to know that MDEC was formerly known as Multimedia Development Corporation launched by your new boss Dr Mahathir back in 1996 under the purview of Science and Technology Ministry which was transferred to Communications and Multimedia Ministry and finally landed under Finance Ministry. Lucky you.

Should you decide to keep this two MoF incorporated companies under the purview of your Ministry, may I suggest you hire an additional secretary-general who is technologically qualified to oversee these two important subsidiaries.

I would strongly advise that your first secretary-general to be a highly qualified accountant to help you solve the massive financial problems and ensure that he is not distracted by all these digital jumbo mumbo from performing his task at hand.

When you next walk into your new office, perhaps you would like to verify an article by The Edge dated Jan 8th 2018 that another MoF company may have acquired a 51% stake in Mulia Property Development Sdn Bhd (for an undisclosed amount) which is developing The Exchange 106 skyscraper at the Tun Razak Exchange. You might need another assistant who is well versed in property development which I believe you will not find it difficult to find among our civil service team.

It would be advisable that you also check with your boss the financial commitments of all the big infrastructure projects that are under the purview of the PMO office like ECRL, Bandar Malaysia, TRX etc. All which leads to a great opportunity to cut costs at other Ministries since they are left with hardly any major projects to manage.

As recommended by your DAP colleague Liew Chin Tong, Malaysia does not need so many Ministries since PMO and the MOF have taken over so many functions on their behalf. In view of the budget constraint, you can merge some of the mini Ministries, either into a 2 in 1 or even 3 in 1 thus reducing redundancy.

If your Pakatan Harapan government can reduce the financial deficits despite zero rating GST, I am sure Harvard Business School will write one its best Management, Finance and Leadership case studies for its world class students.

Talking about GST, you caught the market by surprise by zero rating GST from June 1. While it is an admirable action taken in view of the coming Hari Raya celebrations, most of the SMEs are confused and feeling a bit lost. It will be good if you can bring back Datuk Ahmad Maslan to explain to us how zero rating the GST will bring down retail prices.

I have advised my trading companies to reduce the recommended selling price by 6% for ALL products or as close as possible due to the rounding up of the odd cents which means a savings of 5.8% to 5.99% reduction from the selling price.

However, some of our products will be charged a sales tax of 10% when you implement the 10% sales and service tax. At that time, I will advise my trading companies to raise the recommended selling prices on the affected products accordingly. Kindly advise your still unnamed Trade Minister colleague to restrain his officers from threatening us with profiteering as we are just following the government’s flip-flop policies.

I have a humble wish to make. With our neighbouring Asean countries forging ahead with investments in startup ecosystem and national digital initiatives, Malaysia must not fall behind in this race to the future. It would be advisable for this government to continue funding a sizable annual budget towards supporting an innovative and vibrant digital economy.

A well-run ecosystem will produce many digital entrepreneurs. What is required is to institute good governance, transparent policies and open tenders.

I would however like to extend my appreciation for your ‘nampak banyak teruk tetapi mesti buat jugak’ attitude. You will survive. Lucky us.

Published: https://www.thestar.com.my/business/business-news/2018/05/19/my-wishlist-to-dr-mahathir-and-guan-eng

6/2018 – My wishlist to the new government

An efficient and business friendly civil service will help the SME community greatly.

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Major force: SMEs now number around 500,000 and despite the presence of huge conglomerates, SMEs still provide the most employment opportunities and keep the economic engine running.

Major force: SMEs now number around 500,000 and despite the presence of huge conglomerates, SMEs still provide the most employment opportunities and keep the economic engine running.

Dear Tun Dr Mahathir Mohamad,

Congratulations on your appointment as the 7th Prime Minister of Malaysia.

It has been 15 years since you have retired and your return has raised the hopes of the nation. I had my doubts with regards to your age and health but you have proven to everyone that your mind is still sharp, your retorts still laced with acidic humour and your eyes still having the mischievous twinkle. Vintage Dr M as I have known since my student days in Universiti Malaya. Welcome back.

Since you are about to appoint members of your coalition government to the Cabinet, I would like to share a few grievances facing the entrepreneur community in Malaysia. Hopefully you will have a better perspective of the state of affairs currently faced by entrepreneurs so that your new team of ministers can formulate new strategies, correct dysfunctional current policies and create a new mentality among the huge civil service that you will inherit.

Malaysia under your management for 22 years grew at a robust pace on the back of innovative and hardworking SMEs’ (small and medium enterprises) involvement in manufacturing, agri business, trading and exports. For your information, SMEs now number around 500,000 entities and despite the presence of huge conglomerates, SMEs still provide the most employment opportunities and keeps the economic engine running. You will be pleased to know that SMEs and its employees are the main supporters of Pakatan Harapan.

I would like to suggest some ideas for your new ministers to consider.

No new slogans please: It just confuses the civil service and the public in general. Bring back “Bersih, cekap dan amanah.” It has worked well before, it will work well again. As Tan Sri Rafidah Aziz has said recently, the civil service exists to serve the community and not to lord over the community. An efficient and business friendly civil service will help the SME community greatly.

Efficiency saves time, time is money: Lower costs increase competitiveness. Competitive companies make profits and increase tax collection for the government. Your ministers should focus on controlling the government agencies that increase business costs unnecessarily. Ultimately, lower costs of doing business will result in lower selling prices thus lowering the cost of living for the people.

Eliminating goods and services tax (GST): As an economist, a consumption tax like GST or value-added tax is a sustainable tax collection model for any nation but it must be accompanied by lower personal and corporate income taxes. Pakatan Harapan’s plan to eliminate GST and reinstating the sales and services tax (SST) might reduce the cost of some products that does not incur sales tax at source. But still the net RM20bil loss in government revenue (GST less SST) means a RM20bil expenditure savings for the people. For that, all the SMEs will support your no-GST programme.

Like all businesses, the government needs to balance its books. I believe you can easily find RM10bil savings from your Prime Minister’s Office expenditure alone. Reducing the number of ministries and cabinet size might save you another few billion. In business when we are not able to increase revenue, we have to cut costs. When revenue decreases, we cut more costs. May I humbly suggest you get a sharp CPA (certified public accountant) assistant to help you review how to achieve savings from the expenditures of the various ministries to make up for the loss of GST revenue.

Another major factor in the increase of costs of living was imported inflation due to the weakening of the ringgit (RM3 to RM4.5 per US dollar). From experience, you have had major battles before with currency devaluations and its effects on our economy. I am confident that you will be able to create a stable exchange rate regime that can sustain a decent cost of living vis-a-vis the prevalent income of your citizens. Businesses will be able to plan better in a stable currency environment.

Rule of law: No businesses can survive without the rule of law being applied in a fair and just manner. It is even more unfair when different rules of law applies to different people. Your plan to restore the independence of the judiciary will create market confidence for new investors and citizens alike.

Similarly, your plan to restore the independence of various national institutions brings hope that a check-and-control system for political excesses can be implemented.

Reducing government involvement in business: The government’s role is to help the private sector, especially the SMEs, in growing the economy so that corporate tax revenues grow in tandem. Instead we have so many federal and state enterprises competing in all sectors of the economy. This creates an uneven playing field as the business opportunities dwindle and monopolies are created. Worst still, politicians and civil servants are involved in running such businesses and being inexperienced managers, state enterprises are inefficient and wasteful. There should be a clear separation of roles – politicians and civil servants administering the government and social projects – and leave the businesses to the private sector.

Anti-fake laws: Your decision to rescind this monstrous law augurs well for freedom of speech and expression. An independent judiciary will be able to solve any defamation suits. What will be of interest to the nation will be how your new administration will manage the publication licences of all the Barisan-owned media companies of newspapers and TV stations. You should not worry too much as they are all traditional media assets. Maybe it is time you allow apolitical independent online and offline media companies to exist and grow.

You will be pleased to know that viewership and readership of traditional media have been sliding at an alarming rate. So has their advertising revenue. Most of the lost advertising revenue has gone to social media companies like Google and Facebook, which incidentally are not taxed on their Malaysian revenue. To make matters worse, local advertisers have to pay additional withholding tax to the Inland Revenue Board since the advertising fees are paid online to overseas account. Perhaps you should direct our Inland Revenue to start collecting tax from such companies instead of harassing our local businesses.

Minimum wage of RM1,500: As most business employers will tell you, salary commensurates with productivity. If you go to a McDonald’s outlet in London, for example, a service staff there gets paid twice our salary on a dollar to dollar basis but their staffing efficiency is one to three. What needs to be done is to inculcate our young on the need to work hard and work fast instead of relying on handouts mentality. That said, it is difficult to find staff who is willing to work on minimum wage in the city thus the reliance on foreign workers.

For SMEs, the staffing problem is more acute. Despite the availability of unemployed local graduates in the hundreds of thousands, it is difficult to find Malay or Chinese graduates who can speak and write passable English. In this increasing Internet-driven economy, basic English proficiency is a prerequisite to employment. Your Education Minister will have a tough job reversing 20 years of misdirected education syllabus which does not meet current needs. Supply not able to meet specific demand. Suggest short-term solutions to bridge the gaps.

Hiring the best people to the cabinet: Please select capable and bright talents to be ministers. When GST was implemented, the ex-deputy minister of domestic trade said that GST will not increase the prices of products. After insulting our intelligence, his officers from the ministry compelled our retail chain stores (customers) not to increase the selling price of products in the store for one year. So the retail stores in return forced the suppliers to absorb the 6% GST. As our imported products were void of sales tax, we had to bear the full GST cost ourselves. At that time, ringgit started its devaluation trend so it was a double-whammy hit on importers. Feeling insulted and bullied was an understatement.

In view of the transition to the new digital economy, I would suggest that Tun bring in as many capable and untainted young talents into your various ministries, if possible. Guide them well and we will have a pool of talented leaders who embodies your “Bersih, cekap dan amanah” mantra to take Malaysia into the next millennium.

Talking of young leaders, I would like to make a personal request that you keep Rafizi Ramli out of jail and bring him into your Cabinet. Nurture him and keep him out of harms. This boy from Terengganu has much to learn and much, much more to give to this country.

My last request is for you to appoint Datuk Ambiga Sreenevasan to be the chairman of the Election Commission. She has been complaining non-stop for the last few years, so it will be good if she is allowed to clean up the electoral rolls, tighten up the laws, revamp the machinery and processes so that the whole nation do not have to stay up so late just to get the election results come GE15.

Last but not least, we wish you good health and good governance. Please listen to your doctor’s advice when she tells you to rest and eat well. You are blessed with a lovely and caring spouse. Not every Prime Minister is as lucky as you are.

Keep well sir.

Published: https://www.thestar.com.my/business/business-news/2018/05/12/my-wishlist-to-the-new-government/#EXvAGlTjf0XhqkBj.99

5/2018 – Fake startup entrepreneurs

TIME really flies. In the blink of an eye, my kids are all grown up. My two boys have started their journeys in career and in relationships. My little girl is graduating this July. Finally, my wife has grown accustomed to my rotund face and body even though it has taken her 30 years to do so.

Thirty years ago, we had fake Louis Vuitton bags made in Thailand and China. Now we have fake news made by almost anybody and everybody. There were laws against fake goods and now there are laws against fake news.

We could not tell the difference between the fake goods against the originals then, we are not able to differentiate between the real news and the fake news now.

Only the original experts could tell the difference then, now we have fake experts to spot the fakes from the originals. In the blink of an eye, real becomes fake and fake becomes real.

The powerless will soon be powerful again. Revenge turns to love, love turns to hate and now, hate is in the air. In the end, love will bring us together. Given time, all strained relationships will heal when the universe of power is balanced again.

Time will tell. Words are cheap, living cost is not. Promises made, memory fade. When in power, suffer the same fate. Time and time again, only the elite gain, the mass always suffer in pain. Sugar and spice, once in five years you can get rice. Missing in time, no one can tell, whether your rep is from heaven or hell. Once voted, only time will tell.

Time is money. Cash is king, votes will swing. Money can’t buy you love, everybody tells you so.

The Queen checkmates the King, money means nothing. People will love you, if you give up everything. Money, money, money, ABBA sings so funny. It is a rich man’s world, money rules the world.

If you think I am talking about politicians, it is just a figment of your imagination. Nothing could be more fake than that. I am describing the fake startup entrepreneur who over-promises his investors and his employees. Over time, you can tell whether he is genuine or a convincing fake.

A fake startup entrepreneur is as genuine as a business con man and I have seen many in my lifetime.

A con man tells one lie after another, covers up one hole with another bigger hole until he believes in his own lie. Now he believes he is speaking the truth and his subconscious is not able to differentiate the real from the fake or is it the fake from the real?

As seen in UK and US, some fake startup entrepreneurs are great con man spending investor’s money on a lavish lifestyle until they are caught.

Because of their ability to raise large sums of money, they genuinely believe their deception can continue forever. They have also corrupted their group of managers to participate in their scheme of deception. Cover-ups are normally done en mass at the top. The mass employees are the ones who suffers the consequences of a failed startup.

Genuine politicians have noble intentions. Eradicate poverty, selfless service to the community at large, raise the standard of living, institute good governance and save the world. But there are also fake politicians who are similar to fake startup entrepreneurs who are similar to genuine con men.

To all smart investors, it is advisable to identify these fake entrepreneurs early before you part with your hard earned money. Do not be taken by sugar-coated promises of rich returns because there aren’t any.

If the startup entrepreneur and his wife live a lavish lifestyle on other people’s money, he is no more a startup entrepreneur. He is a con man. And you deserve the entrepreneur you have invested in.

To all the young startup entrepreneurs, please treat investors’ money like your own. Be frugal and do not forget your original noble intention of serving the public good. Do not take lightly your responsibilities towards your employees for their rice bowl is in your hands. You should empower your people towards self sufficiency, meritocracy and performance driven goals.

To all the young politicians, stay true to your original noble intentions. Do not be corrupted by the system and older fake politicians.

Easy money is evil money. Once you succumbed to evil temptations, you are on the hell road of no return. You are our only hope. If the older politicians are fake, discard them and start your own revolution.

To all the genuine older politicians, since there aren’t any, no advice will be forthcoming. Let the young ones rule the world for a change. Sit back, relax and enjoy the rest of your life in comfort. You deserve it just as we deserve you.

Oh by the way, I just realised the general elections is around the corner. To all the voters, please vote wisely. Or you will live to regret in no time. Have a good time at the polls.

Published: https://www.thestar.com.my/business/business-news/2018/04/28/fake-startup-entrepreneurs

4/2018 – Legacy issues in Chinese businesses

Saturday, 24 Mar 2018

SITTING at the Golfers Terrace outside the Main Lounge of Royal Selangor Golf Club (RSGC), one can get a spectacular view of the golf course. Amidst the tranquil ambience and scenic surroundings, one could hardly notice that just outside the gates of RSGC, the Tun Razak interchange is the most congested traffic road in Malaysia.

Celebrating its 125 years anniversary this year, RSGC is one of the oldest golf clubs in Asia, ranking alongside one golf club in India and one in Sri Lanka. All three golf clubs were built by the British where it was once a whites-only-club but since independence, the ownership and management of the clubs have been taken over by local residents.

Being a non-profit club, it is run strictly as a private member’s club, where members elect a committee among themselves to manage the affairs of the day. Club constitution and rules are strictly adhered to, hence the legacy of history is preserved and carried forward to the next generation of members.

Similarly, over the last 60 years or so, many successful Chinese emigrant businessmen in South-East Asia tend to pass their legacies and their businesses to their children. Many fathers distribute their shares in the companies to their sons only whereas the daughters will get cash and share of properties. Many a time, fathers will distribute equal shares to their sons in the name of fairplay not realising that such legacies could lead to potential conflicts that are difficult to mitigate.

I have a friend of some 30 years now having a problem with his brother over the ownership of the business that they have been managing together for the last 30 years. When their father passed away some years ago, he gave his two sons equal shares 50:50. Now that they can’t work together anymore, both brothers are in a deadlock as both refuse to sell their shares to each other. Their last resort will be to go to court for arbitration which will eventually lead to voluntary liquidation. In such cases, the court will appoint a liquidator to manage their company.

I have another friend who had a bigger legacy problem. Her grandfather gave equal shares to his four sons 25:25:25:25. After his passing, the third and fourth sons teamed up together to protest against the first and second son who were managing the family business. So it was a 50:50 deadlock situation and they decided to buy and sell the shareholdings among themselves. But they could not come to an agreement. In the midst of their disputes, the second son aligned with the third son whereas the first son aligned with the fourth. Again it is a 50:50 scenario.

So they went to court and a liquidator was appointed. More disputes followed as they could not come to a unanimous decision and they all did not agree with the way the liquidators worked. So for 25 years, their multiple lawyers and liquidators sued and counter sued and after wasting millions of ringgit in legal and liquidator fees, they manage to lift/suspend the liquidation order set by the courts.

So control of the family holding company finally came back to the family but the shareholdings among the four families remain the same, 25:25:25:25. Their only consolation is that the property assets (whatever is left) have appreciated many times in value.

My friend’s advice is not to go the legal and liquidator way unless you want to experience constant drain on your time and wallet. It is mentally too exhausting. Solve the family problems within. After all, you are still brothers in name and in blood.

After listening to both my friends’ sad stories, I might have to change my will. I have willed that upon my death, all the shares of my companies are to be divided and shared equally among my wife and three children which means 25:25:25:25. What will my children be like and how will they behave after they are married? What kind of influence will my daughter-in-law and son-in-law have over my children? Will my legacy decisions cause them distress in the future?

I will not have to worry about this problem if I am super rich like my namesake tycoon who has three wives and many children. I will assign one listed company to all the children of one wife and each child shall run his/her own company. Each child will have a little kingdom of their own to rule over. Success will be self achieved and failures will be self inflicted. Nobody blames nobody.

Sometimes, fathers have to make the tough decision of choosing one son from the brood to lead manage the family company. In the old days, fortune tends to favour the eldest son but successful entrepreneurs nowadays will choose the most capable of the sons or daughters to take the family into the next generation.

I have known of entrepreneurs who will give the majority shares to the chosen child so that he/she can manage the company effectively with trouble free opposition from his siblings.

It is not difficult to be fair when you distribute cash and properties but any decision on successor of holding companies should be based on merit and capabilities of the chosen child. It will be good if the shareholdings are structured accordingly to ease the smooth transfer of power to the next generation. A wise decision now will not cause legacy problems for the next generation.

Looks like I will have to will to my wife a bigger share so that the family company can proceed with a slight majority decision when necessary. A wise decision now will ensure that I will not get any WhatsApp messages from my wife while I am enjoying the tranquil ambience of a golf course during my afterlife.

Published: https://www.thestar.com.my/business/business-news/2018/03/24/legacy-issues-in-chinese-businesses/

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