Tan Sri Loh Boon Siew and Honda Motor Co. Ltd.

Tan Sri Loh Boon Siew (founder of Boon Siew Sdn Bhd) worked his way up from a mechanic to a motor tycoon as Malaysia's distrib­utor of Honda motorcycles and cars. Here he is with Honda Motor Co Ltd, Japan, founder Soichiro Honda.

BOON SIEW’S LEGACY LIVES ON

Stories by: Ho Wah Foon

SundayStar/14 August 2016/Focus

From rags to riches: Founder of Boon Siew Sdn Bhd Tan Sri Loh Boon Siew worked his way up from a mechanic to a motor tycoon as Malaysia's distrib­utor of Honda motorcycles and cars. Here he is with Honda Motor Co Ltd, Japan, founder Soichiro Honda.

Together in marriage and business: Oriental Holdings Bhd and Boon Siew Sdn Bhd group managing director Datuk Robert Wong Lum Kong beat two other suitors to win the hand of Datin Loh Ean.

By the early 1990's, this China-born immigrant who came with nothing but his bare hands had already accumulated vast stretches of land in Penang and close to 50% of Langkawi, in addition to the famous Honda motor sales busi­ness, plastics making, assembly of motor vehicles, motor parts manu­facturing, plantation, hotel and resorts, as well as property devel­opment.

THE family of the late Tan Sri Loh Boon Siew - the richest man in Penang during his lifetime - has been shrouded in mystery for dec­ades, with the unexplained death of a key family member and wild speculations on the size of their wealth.

So you can imagine the surprise when two family members recent­ly decided to lift the veil of silence, albeit partially.

For years, except for the 1965-listed company Oriental Holdings Bhd that has to regularly report its business dealings and financial results to the stock exchange, not much is known about this illustrious family, their life and their other business activi­ties.

The death of Loh Kah Kheng, the younger of the two sons of Boon Siew, designated to be successor of his vast business empire, grabbed headlines in 1987 when he died mysteriously at his bungalow after experiencing marital problems. In 1999, tragedy struck again. This time, it saw Kah Kheng’s son fall from a condominium in Penang after visiting a girlfriend. Police had classified his demise as “sud­den death”.

Hit by the untimely demise of his dearest son, the devastated Boon Siew became reclusive for some time. But Penangnites still respect­ed this self-made tycoon - mainly for his business acumen and the many charities he had donated to. Today, many can still recall the financial aid they had received from him.

The blow from his son’s death, however, did not deter the shrewd billionaire from identifying the right person to help him manage and expand his business empire.

By the early 1990's, this China-born immigrant who came with nothing but his bare hands had already accumulated vast stretches of land in Penang and close to 50% of Langkawi, in addition to the famous Honda motor sales busi­ness, plastics making, assembly of motor vehicles, motor parts manu­facturing, plantation, hotel and resorts, as well as property devel­opment.

For the new captain of the group, Boon Siew saw the right candidate in a non-blood related “outsider” - Datuk Robert Wong Lum Kong.

This decision in 1987 was made despite the fact that Boon Siew still had another adult son and four adult daughters.

But Wong was no stranger to the family and the business world. The soft-spoken and warm Australian- trained accountant is the husband of Loh’s eldest daughter Ean.

“One of the best and most impor­tant decisions made by Tan Sri Loh was to appoint Robert Wong to run Oriental Holdings and take charge of its motor division. He is now one of the most highly-regarded auto­motive sector managers in the country,” opines Ian Yoong, a for­mer investment banker.

Under Wong’s stewardship, Oriental Holdings saw its revenue surge to RM4.38bil in 2015 from under RMlbil in 1987. Pre-tax prof­it rose more than three folds to RM359mil. For 11 consecutive years, Honda was the number one seller in the local market, overtak­ing Toyota.

Besides the motor trade, Wong had to oversee the group’s other businesses in hotel and resorts, plantation and construction machinery - both local and inter­national. Employees hired directly and indirectly by the Loh family total to some 10,000 now.

“We have preferred to stay low-profiled but friends have been persuading me, at 76 now, to tell the world the good deeds we have done and what we have achieved,” says Wong in a two-hour interview with Sunday Star.

Accompanied by his wife Ean at this rare media interview, Wong adds: “Even though Tan Sri (Loh Boon Siew) is no longer around, his legacies stay. His influence is still strong. His words of wisdom, val­ues and management philosophy are very much alive in this group.”

Even Boon Slew’s love for ener­getic horses is inherited by Wong, who has two gold-plated horse stat­utes in his office. “Horses ready to gallop signify strength, power and loyalty. As someone with a strong sense of loyalty, I like to associate with horses, like Tan Sri,” says Wong at Wisma Kah Motor, Kuala Lumpur.

In fact, Wong has never failed Boon Siew. He has worked tireless­ly non-stop for Oriental Holdings to expand the group into what it is today. His wife complains in jest that they hardly have “proper” hol­idays due to his devotion and com­mitment to work.

But years of night drinking with the Japanese to ensure Honda dis­tributorship was renewed annually has indeed taken a toll on Wong’s appearance. It has left a tired impression on his face and taken away the chi (energy) and vitality from his vocal cord.

This son-in-law has also adopted the careful and frugal management style of Boon Siew. This has ensured Oriental Holdings has a healthy balance sheet.

Yet, like the other members of the Loh family, Wong has failed to inherit the entrepreneurial spirit of Boon Siew. This is conspicuously missing in the second generation.

Loh’s daughter Ean concedes, “We are not like our father who was very entrepreneurial. He dared to venture into new sectors upon seeing business opportuni­ties. He founded the group, we build on the foundation and expand the existing businesses.”

Perhaps, it is for this reason the cash position of Oriental Holdings has been piling up - to some RM2.9 billion at end-2015. Investors are hoping this will be given out as cash dividend if it is not utilised.

Although the interview given by Wong and his wife may not be as comprehensive as the writer has hoped for, it does provide a glimpse into the world of Robert Wong and how business is con­ducted according to Boon Slew’s wishes.

Below are excerpts of the interview:

Q: How did you manage to stay so long in Oriental Holdings, given that you are not one of the Lohs?

Wong: I have great respect for my father-in-law and many of his philosophies. He passed the baton to me after Kah Kheng’s death and I have to be loyal to him and work hard for the company.

Also, I agreed when he said: Robert, Your wife (Ean) has a share in the Loh family’s holding compa­ny, and by contributing to the group, you are helping your wife and your two children.

What have been your great­est achievements in Oriental Holdings?

Wong: I am instrumental in making Honda the best-selling car in Malaysia for 11 consecutive years (non-national car segment) from 1990 to 2000. It was the only company and country in the world to have achieved this. I also played

a key role in maintaining Honda as the No. 1 best-selling motorcycle in Malaysia for almost five decades.

At its height, our motor division achieved a profit of over RM400mil.

But for me, the best is to see all our car and motorcycle dealers becoming millionaires and mul­ti-millionaires. For other financial achievements, you can read the Oriental Holdings’ annual reports.

How did you expand the motor division?

Wong: During those years, Honda distributorship was renewed annually. I had to accom­pany the Japanese to drink and sing karaoke until 2am almost everyday or for about 70% of a year. Luckily, I have an under­standing wife who takes care of the family well.

To answer your doubt: No, I have no other women outside despite all these nights out with the Japanese who placed company interest first and family second.

Behind every successful man is a woman, not many women. One good wife is more than enough.

After 2000, when we set up Honda Malaysia with DRB-Hicom and ventured into assembly and distribution of Honda cars, such drinking sessions stopped.

Ean (chuckling): I make sure my husband does not have women outside. I told my father that since my husband is working fulltime for him, I should be spared. But on my own, I invest in properties in good locations such as Bukit Bintang, Jalan Alor, Imbi, and in plantations.

What is your family’s net worth now after working for the Loh family for over 40 years?

Wong: Don’t compare. One mountain is higher than another. We must be contented with what we have. Money is not everything. It is important to have a happy and harmonious family. We are happy we have some money to do chari­ties, like my father-in-law. We donate more to help the spastic children. In this regard, the Loh family continues to support all the charities funded by Boon Siew.

Is the share of Oriental Holdings undervalued?

Loh: Yes. Its net value per share was RM9.10 at the end of 2015 financial year. We have not re-val- ued the land and properties of the group. If we do it, the value per share should be more than RM20. (On Thursday, the share ended at RM6.55).

We have been quite consistent in giving dividends twice a year. Last year, we gave gross dividends of 20%.

Why are you not utilising your cash pile of RM2.9bil?

Wong: We are expanding and have gone into healthcare sector, but we prefer to be conservative, slow and steady.

As times are bad and the market is facing a lot of uncertainties, cash is king. Many people are not sure what will happen in the next two

years. We want to maintain sus­tainable profit for the group. When there are opportunities, we will act. We have a lot of land bought in the 1960s and 1970s, it may be cheap for us to enter property development. We are also studying whether we should enter the edu­cation and halal food sectors.

At 76, what have you not done for the Loh family?

Wong: You cannot do everything. Now I want to take care of my family and wife.

Don’t get angry at this ques­tion that many want to ask:

When you dated your wife in the early 1960s, was it because she was the daughter of a rich man?

Wong (no anger shown): You must know I came from a middle- class family. My father was also a businessman. Tan Sri Loh was very famous already.

When I returned from Australia after my studies, I did mingle with some rich kids. At that time, there were three men who decided to tackle her. I was the fortunate one to be able to get a date with her.

The first time I went to her house, her family members inter­rogated me like a criminal. Luckily, her grandmother later told every­body to spare me and allow me to take her out.

On the first date, I took her for an Indian movie and later a coffee shop for a simple meal. She accept­ed ill this without complains. She was a very simple person, without the airs of a rich person’s child.

Ean: When his photo was first shown to me, I rejected him because he looked like a playboy with the hairstyle of Elvis Presley. So when he came to our house, he was drilled by my family.

Is there a possibility that the Oriental Holdings will be split up eventually like many family businesses?

Ean: My father had already drawn up everything before he passed away in 1995. He laid down that if any of the six family groups in charge of six different sectors want to sell their share, they must sell to family members and not outsiders.

Wong: He even drew up the suc­cession plan for the second and third generations. We have fol­lowed his wishes. He could see who was good at what in the third generation, as many had returned from overseas education to work in the group during his lifetime. (Note: current executive chairman Datuk Loh Kian Chong of the third generation has held the post since Jan 1, 2015).

Do you think the third gener­ation, which has gained respect from the market, is ready to take over and you will retire soon?

Wong: As senior citizens, we will have to retire one day. There is still a need to balance the old and the young in the management, and to bring stability to the group. The old guards are very loyal and hard­working. They must continue to guide the young.

But our third generation has been with the group for 10 to 20 years and they have risen from the bottom. Apart from the elders, they also need professionals to help them. Teamwork is important. Without teamwork, our motor divi­sion would never have achieved huge success.

What is the outlook for 2016 for Oriental Holdings?

Wong: I believe we can maintain our profitability level. Our motor division will still contribute the most to the bottom line of Oriental Holdings.

The Tycoon Who Kidnappers Shun

Riding high: The late "Mr Honda of Malaysia" testing a motorbike with which he is forever associated.

THE late Tan Sri Loh Boon Siew, whose rags-to-riches story never seems to bore anybody, is a leg­endary tycoon philanthropist that had even awed Penang-based kidnappers.

At the peak of kidnapping activities in the early 1990s, Boon Siew could walk freely without bodyguards and drink in a Penang downtown coffee shop every morning before he went to office, while other tycoons in Malaysia had to surround them­selves with tight security.

“The kidnappers know who I am. They know that if they kid­nap me, I would not be able to do many charities and help the poor,” said Loh, at an interview with this writer for the Chinese Forbes magazine in February 1992 in his bungalow in Jalan Sultan Ahmad Shah in Penang, which is now being turned into a museum.

In this first and last interview he gave to the media, Loh related in Hokkien his early struggles after arriving in Penang from China penniless at the age of 13 in a rat-infested ship that had braved the South China Sea.

As an illiterate, Loh could only do hard labour after arriving in 1929. He displayed his foresight when he chose to be a mechanic apprentice instead of a sedan chair puller that demanded no skill. At night, he would wash filthy busses dotted with cow dung for 10 cents per vehicle at the riverside of Prangin Road. During meal time, he would squat by the roadside, eating plain por­ridge and salted vegetables.

“During those days, sedan chair puller could earn eight dol­lars a month and mechanic only three dollars. My supervisor said I was hopeless in choosing three dollars. I got angry. Instead of sleeping in the mechanic shop, I chose to sleep in the smelly buses at night,” he said.

Through sheer hardwork and intelligence, the frugal lad saved enough to buy secondhand buses at 18, and from there, he became the owner of Penang’s Yellow Bus Company. But all his properties were confiscated during the Japanese occupation.

Boon Siew was determined to rebuild his business after 1945. But the major breakthrough for him came after he obtained the dealership for Japan’s Honda motorcycle. His mechanic skill came in handy. When he was on a sight-seeing trip in a taxi in Osaka, he heard the smooth engine sound of a Hondo motor­cycle. He stopped the rider and checked the make and structure of the motorbike despite the reluctance shown by the Japanese. He then went to Honda to negotiate for a distributorship in Malaysia.

His roaring success in market­ing Honda motorcycles and later motorcars won him the title “Mr Honda of Malaysia”. Meanwhile, Boon Siew went on to set up other businesses through his investment company, Oriental Holdings. He also bought land and properties. By early 1990s, he became the biggest landowner in Penang and possibly owned half of Langkawi island.

In managing companies, Boon Siew was known to be extremely strict with accounting. He told this writer: “I can use my money to personally treat you to a meal of several hundred ringgit, but in company accounts, every sen must be accounted for.”

Before his death in February 1995, Boon Slew’s interests had spanned from the manufacture and sale of Honda vehicles, mak­ing of automotive parts and building materials to property development, hotels and resorts, plantation, plastics - locally and overseas.

For entrepreneurs, his story is inspiring. But for the ordinary Penang people, he is fondly remembered as a philanthropist. Lam Wah Ee Hospital, which gives free treatment to the poor, is still being financed by the Lohs.

Boon Siew had six children - four girls and two boys - from two marriages. He appointed all his daughters as directors when he formed Boon Siew Sdn Bhd in 1957 as he believed that they should all have a fair share of the family fortune. Later on, his sons- in-law became directors as well.