New Co-CEO Appointed at NWS Holdings
New World Development’s infrastructure and construction segment, NWS Holdings, has named Brian Cheng Chi-ming, the second eldest son of the conglomerate’s chairman Henry Cheng, as the new co-CEO. This move comes amid growing curiosity about the transfer of leadership within the influential family’s business empire, which spans property and retail sectors.
Management Shakeup at NWS Holdings
In a broader realignment of its management team, 41-year-old Brian Cheng is set to share the CEO role with Gilbert Ho Chi-hang, the current COO of NWS, as detailed in a recent filing with the Hong Kong stock exchange. Brian’s advancement follows the approval of a proposal by the Cheng family to privatize NWS in a HK$35.5 billion buyout, which included acquiring shares not already owned by the family, particularly a significant portion associated with their real estate venture, New World Development.
Executive Role Reassignments
Alongside Brian’s promotion, NWS’s former CEO, Eric Ma Siu-cheung, has resigned to assume the position of COO for NWD, aiming to support CEO Adrian Cheng in the day-to-day operations in Hong Kong. These decisions were officially announced in another filing made by the developer on the same day. Additionally, Adrian Cheng has undergone a shift from being an executive director at NWS to a non-executive director role.
Emphasis on Corporate Governance
NWS believes these recent executive changes will contribute to better transparency and independence in the selection and appointment process of independent non-executive directors. The company also anticipates improvements in board recruitment, appointment, and succession planning strategies as a result of these shifts. The newly announced executive moves are set to be effective from January 1st.
New World Development’s Leadership Scenario
These appointments mark the positioning of three of Henry Cheng’s children as CEOs within the family business framework. Sonia Cheng Chi-man leads the Rosewood Hotel Group and holds a joint vice-chairman position at jewelry giant Chow Tai Fook. Brian’s younger brother, Christopher Cheng Chi-leong, serves as an executive director at NWS.
Potential Successor for Family Business Empire
The leadership change comes shortly after the family patriarch, Henry Cheng, alluded to the ongoing search for a successor in a television interview, indicating the possibility of considering non-family candidates. This introduces some uncertainty about the previously anticipated ascension of Adrian Cheng, who is the current CEO of NWD, to the helm of the family’s conglomerate.
Challenges Ahead for the New Co-CEO
Brian Cheng is stepping into his new leadership role at a time when NWD is facing high levels of debt and a lack of market confidence, coinciding with a downturn in Hong Kong’s property sector. The Cheng family has shown its support by purchasing additional company shares, amid the stock price falling to a two-decade low and a cumulative year-to-date decrease that outpaces other leading Hong Kong developers.
Deleveraging Strategy and Asset Disposals
With investor sentiment deteriorating towards NWD’s stock and bonds, the group has executed strategic financial maneuvers, such as offering to buy back a portion of its bonds and selling off non-core assets. These actions are part of an ongoing commitment to decrease the company’s debt burden and improve its financial health over the next several years.