The banker who groomed many Hong Kong real-estate operators into Forbes super-rich tycoons died last week. Former HSBC chairman Michael Sandberg passed away at the age of 90 on July 2, according to an obituary by The Daily Telegraph on July 7.
As the head of HSBC between 1977 and 1986, Sandberg was widely credited for his close association with up-and-coming Hong Kong tycoons before they made their names, and for financing them as they became business superstars.
One classic example was HSBC’s decision to sell its stake in Hutchison Whampoa, then a British hong (trading company), to Li Ka-shing’s Cheung Kong Holdings in 1979. The deal gave Li, a plastic-flower maker turned landlord, a portfolio of diversified businesses that eventually became a global conglomerate in container ports and other entities.
It was reported that HSBC got rid of its 22% stake in the troubled Hutchison Whampoa for only HK$639 million (US$81.8 million), which was also fully financed by the bank. The deal was widely regarded as a steal for Li that paved the way to his becoming a “superman”. Sandberg later explained that he picked Li because he believed Li would become the richest man in Hong Kong. Li did.
Li was not the only tycoon Sandberg groomed. He also helped Yue-Kong Pao sell out his shipping fleet in exchange for the control of another British hong, Wharf Holdings, and later Wheelock and Marden, which gave him exposure to Hong Kong real estate (including the city’s biggest shopping mall, Harbour City), shipping terminals, retail and ferries.
All this is perhaps why Sandberg was described as “more of a dealmaker than a traditional banker” by The Daily Telegraph.
During his reign at HSBC, Sandberg witnessed a crunch in Hong Kong real estate after the Sino-British Joint Declaration in 1984, when a few aggressive developers had to sell down assets to finance their property investments. One of the beneficiaries was New World Development founder Cheng Yu-tung, who was well known for having the guts to accumulate land during the low tide when nobody wanted it. After his retirement from HSBC, Sandberg joined New World Development as non-executive director for 21 years (1987 to 2008).
He also served for 10 years in Li Ka-shing’s Power Assets (1988-1998), and his last appointment was with mainland Chinese developer Vanke Property (Overseas), where he stayed for four and a half years, until May 2011.
His longest board appointment was with Windsor Industrial, a small textile and property company owned by Vincent Chou Wen-hsien, who was chairman of Vanke from 1996 and 2011. Sandberg worked with Windsor from 1969 to 1977, before he became HSBC chairman, and rejoined the firm in 1987, staying until 2006, according to webb-site.com.
Sandberg’s infatuation with landlords might also explain why he decided to build a new HSBC headquarters in Hong Kong’s Central district. Over five years, he spent US$700 million on the headquarters designed by Norman Foster, and when it was completed in 1985, it was the world’s most expensive building.
In 1997, he was created a life peer in the British House of Lords as Baron Sandberg of Passfield in the County of Hampshire.
What did he really do for the betterment of the world?