Heirs and disgraces

Liu Shan was one of the most derided princelings to ascend the throne. The second and final ruler of the state of Shu during the Three Kingdoms period (which spanned the years 220 to 280), Liu and his family were shipped back to the court of his conquerors, the state of Wei, in the year 263. Liu and his retinue were then invited to a feast at which Shu dances were staged. All in the entourage were reduced to tears, except Liu who seemed to enjoy the show. When asked if he missed his former home, he said: “I am happy here and don’t think of Shu at all.” The response became a popular Chinese idiom for someone who over-indulges in pleasure and forgets their duties. ‘Edou’ – Liu’s name as a child – has also come to be associated with underachievers from powerful families.

That descriptor was getting mention again on social media this month after a disastrous few days for Wang Sicong, the son of Wanda Group billionaire Wang Jianlin.

To many Chinese the 33 year-old is a spoiled fuerdai (the term for ‘second generation’ heirs to wealthy families) because of his errant behaviour (see WiC284 for an early example). With 41 million followers on weibo, Wang delights in a playboy persona and courts publicity whenever he can. He found his name at the top of the weibo search rankings for the wrong reasons again last week after a livestreamer leaked records of a WeChat conversation with him online.

Apparently Wang had been pursuing internet celebrity Sun Yining for some time but she was uninterested in his romantic advances. In a scrawl of screenshots posted online, Wang can be seen trying to cajole Sun to meet him at a bar. When she declines he threatens to make public some of her dealings with advertisers.

In response Sun decided to publish their lengthy chat for all to see and gave the story a further push by proclaiming that she is actually a lesbian.

The tawdry affair – tagged under “Wang Sicong is a terrible pursuer” – was then viewed hundreds of million times online in a couple of days.

“Wang has raised the bar for simpletons,” the Global Times admonished, claiming that the Wanda heir had sent “bullying” messages.

Of course Wang is one of the richest singletons in the country too. He is said to have received Rmb500 million ($55.3 million) from his father Wang Jianlin, with which he founded his own private equity firm Prometheus, as well as a number of internet start-ups.

Wang’s track record in business has been mixed, however, and netizens were shocked in 2019 when he went onto the laolai list – an official record of “discredited individuals” – after he was sued by creditors for at least $20 million of unpaid debts.

Indeed, such has been Wang’s behaviour that few believe that he will take over from his father when the 66 year-old eventually decides to step down from his property-to-entertainment conglomerate.

In 2016, when the Wanda boss was making a spate of overseas investments, he touched on the succession issue, telling international media that his son didn’t want the job. “To take over the entire group, showing up very early, working non-stop for six or seven days each week, without a life… I don’t think he’s a big fan of that. Young people feel differently toward life; freedom probably means more to him,” he added.

Other comments attributed to Wang Jianlin on the company’s website strengthened the point. “Probably it will be better to hand over to professional managers and have us sit on the board and see them run the company”, he said.

Wanda’s succession issues might be more complicated were there more than one princeling waiting to take over. That scenario seems to have created a headache for China’s best-known butcher, Wan Long (see WiC201).

The 81 year-old still serves as chairman and chief executive officer of WH Group – which combined China’s Shuanghui with America’s Smithfield in 2013, making it one of the world’s biggest pork producers and processors. But his two sons have worked for him for some time: Wan Hongjian, the elder, as WH’s director and vice president, and the younger Hongwei as personal assistant to his father.

Investors were shocked last Friday when WH announced in a stock exchange filing in Hong Kong that Wan Hongjian had been sacked. Wan was “unable to fulfil his duties of skill, care and diligence as a director due to his recent misconduct of aggressive behaviours against the company’s properties,” it explained. Media outlets scrambled for a fuller explanation but the Wan family has been stonily silent since.

According to Time Weekly, Wan Hongjian joined his father’s company 30 years ago. Starting as a factory worker, he worked on the pork processing line before climbing the ranks to become a director. With the 52 year-old’s sudden sacking, the WH boss must have decided on making his younger son (who is 48) his successor, Time Weekly claimed.

But even if an heir-apparent can prove their managerial credentials, the path to the top job can still be unpredictable, it seems.

This was the experience this month of another fuerdai – Steven Zhang, the only son of Zhang Jindong, founder of the retail-to-sports conglomerate Suning.

Zhang junior was put in charge of Inter Milan, the Italian football powerhouse acquired by Suning in 2016. Since then the team has prospered on the pitch, with Inter winning last season’s Serie A league title. Back in China Suning has been struggling to survive a cash crunch, however, despite a plan for a partial nationalisation by two state firms backed by the Shenzhen government to fend off its financial troubles.

Earlier this month the company’s shares were suspended from trading after a Beijing court ordered a freeze on more than a quarter of the Zhang family’s shares. According to Tencent News, the Rmb15 billion deal with the Shenzhen SOEs has not yet been concluded either, because the Zhang family has pledged too many of its shares in Suning to third parties as loan collateral. The delay in the deal seems to be technical but the problems point to more interlocking debt concerns for Suning, Tencent News claims.

That is putting a lot more pressure on Zhang junior, who has been forced to rebut rumours that Suning is looking for a buyer for Inter Milan, following the departure of head coach Antonio Conte last month over concerns about the club’s finances.

The Chinese media reports that Zhang also met with Milan’s mayor Giuseppe Sala this month to recommit to a plan to build a new stadium in the city. But the newspapers are sceptical about how the fuerdai will find his share of the finance for the $1.3 billion project, adding to the anxiety of Inter Milan fans that their team is being hawked around to the highest bidder.

In this respect the younger Zhang’s priority may well be finding a new owner for the Italian club as a way of buying time to rescue the family’s flagging finances. And if he can do that the story of this particular fuerdai could buck the more traditional narrative: a son that saves the family empire rather than frittering away its fortunes…

 

 

Keeping track, 2 Jul, 2021: We reported last week that Steven Zhang, chairman of Italian football club Inter Milan, was one of a group of young ‘tycoon-heirs’ facing testing times, despite the team’s triumph in the Italian league last year.

Back in China a proposed investment by two Shenzhen state enterprises in Suning.com, the retail conglomerate founded by Zhang’s father, has been put on hold. According to a Bloomberg report this week, a consortium led by Alibaba and the Jiangsu provincial government is nearing a deal to buy a stake in Suning.com instead. Trading in the Shenzhen-listed firm has been suspended since June 23. In a stock exchange circular published last month, Suning.com confirmed that Zhang senior was working on a “major transaction” involving a share sale, although the company has not disclosed the identity of the potential investors.

Meanwhile, a spokesperson for Suning that contacted WiC last week to highlight that there’s no direct link between the financial situation at Inter Milan and Suning.com. In an interview with Italian media outlet La Gazzetta Dello Sport, Zhang junior also pointed out that all the major European football clubs have been under financial pressure in the wake of the Covid-19 pandemic. “There was no offer to buy the club,” Zhang junior confirmed of other speculation about its future. “We always think in the medium-long term and we are always open to commercial or financial partners who can increase revenues and be synergistic with our project for the good of Inter.”

Zhang seemed to be indicating that both parties would be around for the long haul, La Gazzetta Dello Sport suggested. “Hopefully both Suning and Inter will see their fortunes uptick in the near future and the Nerazzurri can get back on track,” the sports website said, referencing the team’s nickname. “And if not, well, at least we have this Scudetto [Italy’s ‘Serie A’ football title] to look back on from the Suning era.”

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