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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

TRUCES

Will Jardines Return?


A TRADITION AT JARDINE Matheson was to fire a gun to salute the departure of its taipan, or "big boss." Fifty years ago, the Royal Navy gave the Hong Kong-based British trading house a cannon to revive the custom and herald its return to business in the ravaged colony after World War II. Since then, the hong has been firing its "noon-day gun" every day.

But the question these days is whether Jardines is coming or going. Faced with the end of British rule, the group decided to play it safe, stunning the Hong Kong business community 12 years ago by relocating its legal domicile to Bermuda. Then in December 1994, Jardines switched its secondary listings on the stock market to Singapore. The move, it has insisted, stemmed from fears of a corporate takeover -- and Hong Kong authorities refused to grant the group special exemptions.

Yet many believed that the "Noble House" was retreating in the face of 1997. In China, memories of Jardines' opium trade in the last century still rankle. More recently, Chinese leaders have accused the group -- especially the Keswick brothers, Simon and Henry, who control it from London -- of supporting Hong Kong Governor Chris Patten's political reforms, which Beijing fiercely opposed. The Chinese withheld approval for a big container-terminal project in the territory known as CT9 because Jardines was involved.

But a year ago, just after the delisting of stocks, new taipan Alasdair Morrison made headlines by publicly apologizing to China for his company's withdrawal moves. Last month, during a visit by British Foreign Secretary Malcolm Rifkind, Beijing gave the go-ahead for CT9. And days later, China's Hong Kong affairs chief Lu Ping issued an invitation to Jardines: "If they find that Singapore is not as good as Hong Kong, we welcome them to return."

Lu's statement lent credence to rumors swirling since December that Jardines was planning to relist some of its companies -- which include Hongkong Land, Mandarin Oriental and Dairy Farm -- in the territory. The talk centered on a comeback of some of the counters or the listing of a restructured corporation, perhaps with a Chinese partner. But the group denies that any relisting plans are afoot.

A return may make some sense. Jardines' U.S.-dollar-denominated issues have languished in Singapore, mainly because the listings are not included among the market-moving index stocks. And the group's physical presence remains overwhelmingly in Hong Kong, where it is the largest private employer with a staff of 58,000, and in China. Among its mainland investments: a Mercedes-Benz distributorship in southern China, Pizza Hut operations in several big cities, and construction project-management works in Tianjin, Hangzhou, Shenzhen and Zhuhai.

Has Jardines decided it has too much at stake in the Chinese market? "Clearly, the [Jardines-Beijing] relationship is looking a little brighter," says Rebecca Woo of Nomura Research Institute. But she does not expect Jardines to jump at Lu's invitation. The group has "little practical vested interest in China and management is directing corporate strategy toward the wider ASEAN region." There remains the issue of corporate regulation. Says Woo: "With the Keswicks in control, it's not going to happen. They would have to go through a severe internal restructuring." But if Jardines has a will to get back into the China game, it may yet find a way.

-- By Alejandro Reyes

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