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World’s youngest billionaire owns Cayman company but takes little part in it

loganBy Toh Han Shih and Tiffany Ap From South China Post

Why the world’s youngest billionaire plays little part in running her own Hong Kong-listed empire

The secretive 24-year-old Hong Kong woman named by Forbes magazine as the world’s youngest billionaire plays little part in the running of the company she owns and her residency in the city ensures her mainland father’s business empire is legitimately sheltered from the Chinese government and the taxman, the South China Morning Post can reveal.

Perenna Kei Hoi-ting became a US dollar billionaire after the company in her name, Logan Property Holdings, was listed in Hong Kong on December 20 last year. Her wealth increased following the listing as Logan’s share price rose from HK$2.10 to HK$2.36 on March 19. Forbes put her net worth at an estimated US$1.3 billion.

According to WealthX, an international firm that collates information on the world’s ultra-wealthy, Kei, whose name in Putonghua is Ji Peili, holds liquid assets of at least US$6.5 million and lives in Tsim Sha Tsui.

But despite the reported fortune that suggests a savvy businesswoman who built a mainland real estate empire, Logan’s IPO prospectus paints a different picture. And analysts believe the real power lies behind her throne, with the company using her name and Hong Kong status to minimise taxes and avoid having to reveal the secretive offshore companies owned by her family. This practice is not illegal.

kei_inset_net_0The IPO prospectus, compiled by a company ahead of a listing to give detailed information to prospective investors, firmly states that the company reins are held by Kei’s father, Ji Haipeng, despite Kei jointly owning 85 per cent of the company with her father through various holdings.

The prospectus reads: “Given that Ms Kei has limited experience in the real estate business, a declaration was made by Ms Kei which declared the ultimate control over all major affairs of the group are vested in Mr Ji, the father of Ms Kei, and Ms Kei had and will continue to act under the instruction of Mr Ji from time to time.”

When the Post called Logan Property and asked to speak to Kei, our reporter was told she was not involved in the day-to-day operations of the firm and did not work at the company’s Shenzhen headquarters.

A Hong Kong analyst who did not wish to be identified said bluntly: “I don’t think she built this business. She’s a de facto nominee for her father.”

As far back as 2010, Kei, at the tender age of 20, was listed as playing a major part in the creation and organisation of the company, involving multimillion dollar offshore deals.

When Logan was incorporated in the Cayman Islands on May 14 of that year the company was wholly owned by Kei, according to the IPO prospectus. However, it was clear that the decision-makers were in fact her father and other directors.

In 2010, Yuen Ming Investments, a British Virgin Islands (BVI) company controlled by Kei, acquired 75 per cent of Shenzhen Youkaisi Investment, a mainland property firm, for 375 million yuan (HK$474 million). Because Kei was unable to attend a meeting on the deal, Cheung Hok Ming, a friend of her father’s from his home city of Shantou, Guangdong province, arranged the acquisition, the prospectus said.

According to the prospectus Kei is a Chinese national and is also a citizen of the Caribbean offshore haven of Nevis and St Kitts. In addition she, in November 2012, acquired a Hong Kong ID card.

Ji Haipeng, meanwhile is a Chinese national, with his address registered in Shantou.

Kei’s status as a Hong Kong resident allows her to own offshore companies without informing the Chinese government of their existence, whereas her father, as a Chinese national, would be obliged to. She is the current and former owner of a number of companies registered in offshore havens including the British Virgin Islands and the Cayman Islands.

In addition a Hong Kong permanent resident is not subject to tax on dividend income from companies, according to William Chan, a tax partner of international tax and advisory firm Grant Thornton.

A Chinese national, however is subject to tax on worldwide income. By transferring the shares in his companies to his daughter, Ji Haipeng would legitimately minimise his tax bill while still being able to control the companies in question, Chan said.

David Webb, a Hong Kong corporate governance activist, described Hong Kong as “the Monaco of China”, adding that it is “attractive for mainland tycoons to be tax residents and remove themselves from the mainland tax system”.

Raymond So Wai-man, dean of the business school of Hang Seng Management College, said Kei’s position within Logan was unusual and raised questions about the control of corporations.

“Having such a young person as Perenna Kei own the majority of a Hong Kong-listed company is not common,” he said.

“Although Kei’s position in her company is legal and meets the requirements of the Hong Kong Stock Exchange, there is room for improvement in corporate governance.”

While little is known about her current personal life, Kei is understood to be involved in philanthropy, mainly through Logan Property. Last December she donated HK$120,000 to the Community Chest of Hong Kong and has previously donated to the Xiqu Central Primary School, Red Cross Society of China and Guangxi Charity Foundation.

An interview with Singapore’s Today newspaper in 2009 gave an insight into her earlier aspirations and education.

The piece painted a picture of a 19-year-old with ambitions to study in London.

“I’m confident of excelling in mathematics and economics, but GP (General Paper) was a tough paper for me,” she told the newspaper.

“I didn’t want to spend two years in a place that could not guarantee me a path to a university in the UK,” she continued, explaining her reason to withdraw from junior college after four months, before taking up a place at the Singapore Institute of Management. She graduated from the University of London in 2011 with a bachelor’s degree in finance and economics.

Kei’s dependence on her father is in stark contrast to that of another young Chinese woman tycoon, Yang Huiyan.

In 2007, at the age of 25, Yang became the mainland’s richest person and Asia’s richest woman when her property firm, Country Garden Holdings, went public in Hong Kong.

Yang’s 58.2 per cent stake in Country Garden was worth HK$34.91 billion on March 18.

Like Kei, Yang is a daughter of the company’s chairman, Yeung Kwok Keung. But unlike Kei she plays a more active role, as executive director of the company.

Country Garden’s IPO prospectus said: “In 2005, Yeung Kwok Keung transferred his interests in our mainland companies to his daughter due to his intention to train Yang Huiyan as the successor of his family’s interest in the group. Yang Huiyan joined the group in spring 2005 as the personal assistant to Yeung Kwok Keung and assisted Mr Yeung in the formulation of development strategies, investment planning and overall project planning.”

It remains to be seen whether Kei will become more involved in the business, or whether her father will choose to retain control.

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