An American Touch in Hong Kong

HONG KONG —  Jardine Matheson Holdings is Hong Kong’s best known and oldest British company, with a swashbuckling history that spans opium trading to ice cream production.

Now the future of the business immortalized in James Clavell’s best-selling novels rests largely with a New York investment banker hired for his takeover expertise.

“Strangely enough, I don’t find it much different here,” said Brian Powers, Jardine’s executive director. “You have the same bankers and lawyers. I don’t find it nearly the wild scene I’d thought it would be.”

Powers, who previously worked for the New York investment banking firm of James D. Wolfensohn, is the strategist behind Jardine Chairman Simon Keswick, a Briton whose clan has run the company for more than a century and is the basis for Clavell’s novels “Taipan” and “Noble House.”

Jardine’s decision to recruit Powers partly reflects the company’s increasingly international outlook and departure from the businesses it historically dominated in Hong Kong, mostly trading and shipping.

It also illustrates the growing presence in Hong Kong of American expatriates, at about 14,000 the largest single group of non-Chinese in the British colony.

Financially troubled a few years ago because of soaring debts and soured investments in real estate, shipping and petroleum, Jardine only recently emerged as a slimmer but more profitable conglomerate.

“We need to keep our Asian businesses growing,” Powers said during an interview in his wood-paneled 48th-floor office overlooking Victoria harbor. Describing himself as overseer of mergers and acquisitions, he said that “when we see new development opportunities we will do them.”

Now, he said, the company that thrived on opium, silk and tea trading in Asia during the last century is likely to become more involved in insurance, investment banking and financial services, both in Hong Kong and elsewhere.

It is the “elsewhere” part of that plan that has led to widespread skepticism about Jardine’s commitment to Hong Kong, which Britain will surrender to China in 1997 under an agreement reached two years ago.

Compelling Doubts

The Chinese communists have promised that Hong Kong’s capitalist system will remain unchanged for 50 years after the takeover.

But doubts over whether such a pact will work compelled Jardine to move its formal home to Bermuda in 1984, a move that shook the colony and now is called the “Bermuda bombshell.”

More recently, Jardine moved another subsidiary to Bermuda as part of a restructuring aimed at strengthening the company’s major areas--engineering, construction, insurance, securities, transportation, marketing and real estate.

“We’ve said all along, way before 1997 was an issue, that we’d like to have our assets 50% Hong Kong-based and 50% non-Asian-based,” Powers said. “We would certainly like to get that balance; we think that’s the right balance. That means we’re going to have a major presence here.”

To be sure, most of Jardine’s business is in Asia, with interests that include foreign wine sales and management of 10 luxury hotels.

Although Powers expressed confidence that the Chinese-British takeover agreement will work, he acknowledged that doubts about the future continue to nag Hong Kong.

“Anything that could go wrong in China could hurt Hong Kong,” Powers said. “But you probably have that risk in almost every country in the world. If you were an investor in France five years ago when it went socialist, it was quite a trauma, and 1997 could turn into that trauma here.”

Nevertheless, he said, “I think most people see a pretty small chance of that happening. The great likelihood is that Hong Kong’s going to go on pretty much like it has for the last 100 years.”