The Man Who Would Be Asia's Power King
Francis Yeoh Sock Ping, managing director of Malaysia's YTL Corp., is fond of grand gestures. In 1993, Yeoh hired opera superstar Luciano Pavarotti for a private performance for Malaysian Prime Minister Mahathir Mohammed and a select group of guests at Yeoh's posh resort. Now he's at it again. In late October, Yeoh made a bold but unsuccessful attempt to outbid U.S.-based Southern Co. for control of Gordon Wu's Hong Kong-based Consolidated Electric Power Asia (CEPA) Ltd.'s electricity generating operations.
The failed, $2.6 billion bid was a long shot and would have constituted a cash drain on YTL, which has assets of just under $1 billion. But it would have made YTL Asia's largest independent electric power producer, giving the Malaysian company plants in China and the Philippines through CEPA. Even though it didn't happen, the bid has spotlighted the grand ambitions of a man who wants to build an Asian giant in power plants and construction. It also has underscored the powerful backing Yeoh enjoys from the Malaysian government, which had promised YTL $1 billion in equity to help finance the CEPA purchase.
It's clear this Malaysian tycoon is the strongest rival to Wu's claim to be the king of Asian infrastructure. Although they have much in common, Yeoh--a British-trained civil engineer--has long trailed Wu in the contest. Like Wu, Yeoh branched out from a domestic construction company started 40 years ago by his father. But despite several years of trying and a few preliminary agreements, YTL still doesn't own any power plants outside Malaysia.
Although Yeoh has won a place as one of Mahathir's favorite businessmen, he's an outsider. A born-again Chinese Christian in a Muslim Malay country, Yeoh frequently says "God told me" to take a particular action. He recently stated that it was "God's will" that YTL's share price, which has jumped sixfold since 1992, has gone up so sharply. Yeoh is also proud of his Chinese heritage and of a grandfather who emigrated to British Malaya to build a better life. Images of horses dominate the decor in his penthouse office in Kuala Lumpur--reminders of his Chinese heritage, since he was born in the year of the horse, according to the Chinese zodiac calendar.
Yeoh's success owes much to his hard work. But close ties with Prime Minister Mahathir have helped catapult YTL into the ranks of Malaysia's largest companies. At a surprise 70th birthday party for Mahathir at YTL's exclusive island resort off the northwest coast of Malaysia last year, Mahathir sang a karaoke version of My Way. Yeoh makes no apologies for his close relationships. "The government likes performers," he boasted in an interview earlier this year.
One of Yeoh's biggest breaks came in 1992 when Mahathir, frustrated by a blackout at the state-owned electricity monopoly, handed Yeoh contracts for the country's first two independent power stations. Malaysia's cash-rich retirement fund provided half of the financing. The generating units, which provide power to the state-owned utility at a fixed price, have been money machines. Fully half of YTL's $142 million pretax profits on sales of $640 million for the latest fiscal year came from the plants, which began operating in late 1994.
BIDDING IRREGULARITIES? A regular member of Mahathir's entourage on state visits abroad, Yeoh has used his political contacts shrewdly. He built low-cost housing in South Africa, in a $5 million Malaysian government aid program, to further Mahathir's ambitions to play a leadership role in the developing world. Yeoh also says YTL is close to signing an agreement for a power plant in China, where his group of partners includes Premier Li Peng's daughter, Li Xiao Lin. In the most controversial deal to date, YTL in September signed a letter of intent to run a major power plant in Zimbabwe. The project provoked a political uproar in that country, with the entire Zimbabwe Electricity Supply Board being fired after protesting what it said were irregularities in the bidding process.
The high-flying Yeoh is determined to keep piling on assets and expanding into lucrative Asian markets. There's no question that Yeoh has the energy, enthusiasm, and backing. But the higher he flies, the greater the risks. Yeoh's managerial mettle in complex overseas projects has yet to be truly tested. It seems his testing time is just ahead.