From burgers to billions

From burgers to billions

FOR Tan Sri Vincent Tan Chee Yioun, 50, restructuring his vast Berjaya

Group is his main task now. With nine listed entities under his control,

the Batu Pahat-born tycoon’s rise to riches is an interesting one. He

certainly has come a long way. In this rare interview published in Dec 16,

1993, you will be able to track the early years of his success. Since the

interview, he has moved into information technology, telecommunications

and media-related businesses.

HE OWNS two casinos and never gambles, 10 golf courses and doesn’t play

the game.

Being unorthodox has always been the hallmark of the Malaysian maverick

called Vincent – there is arguably no one in corporate Malaysia as readily

recognised by his first name as Berjaya Group chief Tan Sri Vincent Tan

Chee Yioun. Although detractors decry his aggressive tactics, the fact of

the matter is that over a span of nine years, Tan has wrought a near-

miracle – he has grown a modest RM55 million turnover company 45- fold.

In the first exclusive interview Tan has ever granted, he tells

Malaysian Business, `Next year, the group’s turnover should hit RM2.5

billion.’

That would be a 36 per cent hike from Berjaya Group’s flat 1992 and 1993

revenue levels of about RM1.8 billion. Indeed, the group made the cut in

style in MB’s last issue, which highlighted the biggest owners on the

Kuala Lumpur Stock Exchange (KLSE). Berjaya ranked seventh.

By anyone’s reckoning, Tan Chee Yioun has arrived. Today, he has seven

companies listed on the Kuala Lumpur Stock Exchange (including a remaining

stake in Berjaya Textiles) and a plethora of private businesses. He’s not

totally sure but reckons he has between 170 and 180 companies. And his

business interests range from gaming to the media, light truck assembly to

consumer goods, national sewerage to financial services.

Even so, his techniques have birthed a legion of detractors. Among them:

energetic expansion on the back of huge borrowings; a multitude of rights

issues – he himself has lost count; and forays that others might term

greenmail but which have usually paid off. In the process, Tan has become

an inordinately rich man. Yet for quite some time, there has been a

negative perception about him, though this has now changed.

Indeed, for a period, it was fashionable among corporate watchers to

deprecate Tan’s methods of dealing. Again, interestingly, that appears to

be changing. And as Tan points out, `If I am such a terrible person, how

do I manage to close so many deals a year?’

Good question.

Part of the answer may lie in his innate charm. According to his

childhood friend, David Chua, `Vincent mixes with people well. That’s

important in business – for people to want to keep doing business with

you.’

Thus far, Tan has done very well indeed. At current market values,

Berjaya Group alone has a market capitalisation of RM1.4 billion. Tan

maintains that his stake in the company has been reduced slightly to 45

per cent, giving him a paper worth of RM630 million.

His once monumental personal gearing is widely believed by the market to

be all but eliminated. Additionally, in late November, Berjaya Group’s

direct equity stakes in Berjaya Industrial, Berjaya Sports Toto and

Berjaya Singer were valued at more than RM3.3 billion.

Even disregarding Tan’s control of these and other listed companies, his

private investments coupled with his Berjaya Group stake have catapulted

him into the ranks of the seriously wealthy. One senior stockmarket

observer notes, `He must be worth at least 1 billion.’

Being a debt-free billionaire at 41 is quite an accomplishment. Tan made

his debut on Feb 23, 1952. His father owned a small transportation company

in Batu Pahat. There were seven brothers and a youngest sister, with Chee

Yioun – `Vincent’ was only adopted when he started work in KL in the early

1970s – being the fourth oldest.

When Tan was young, one brother was killed in a car crash. The only

other sibling to enter business is his youngest brother Datuk Danny Tan

Chee Sing, born four years after him. Danny is one of 10 Berjaya group

executive directors.

Chua remembers his school days with Tan. `Although he was not an

outstanding scholar, in his own way he was well recognised and had his own

circle of friends.’

Young Tan finished Form Five and went to work in 1970 as a bank clerk in

United Malayan Banking Corporation. Simultaneously he began a career as a

life insurance agent for American International Assurance. He reminisces,

`I was making five or six times more from insurance than I was from the

bank.’

Despite that, he stuck it out behind the counter for one year and seven

months. He was tempted to leave after just seven months but, he says

ruefully, `My father didn’t like the idea of me being a life insurance

agent!’

He made the plunge into selling life insurance full time in 1972, and

eventually became, at 21, the youngest AIA agency supervisor. In 1973, Tan

went looking for Chua who had finished university and had begun work.

Chua chuckles and remembers, `Vincent was probably the first person in

Kuala Lumpur then to have a calling card with his photograph on it.’ As

Chua observes, `The insurance career gave him a good grounding in

developing contacts with government officials and private sector

businessmen.’

That willingness to work hard and create the right impression has served

Tan well. Even today, the man is said to work 10- or 11-hour days,

starting work at 10 am and staying put in his office at the Shahzan

Prudential Tower till 8 or 9 pm.

Although Tan never went to university, he replaced his lack of a

tertiary education with reading – he is said to be an avid reader of

business magazines like Forbes and Business Week. Says Tan, `I started

reading Fortune when I was a bank clerk. I used to borrow it from one of

the officers.’ Indeed his eventual success hinged on that habit. In 1973,

he wrote to McDonald’s in the US after reading about the company in Time

magazine.

He tried to interest the US food giant in letting him have the franchise

for Malaysia. McDonald’s refused to bite but did send the enthusiastic

life insurance man a pile of literature on the company. By that time

(1976), Tan had already left insurance to begin importing cars and dabble

in real estate. But he kept hounding McDonald’s. He says, `I kept in

communication until 1979.’

His persistence paid off. That year, McDonald’s opened in Singapore, and

Tan says he was the only Malaysian invited by McDonald’s to go for the

opening. A year later, he had secured the Malaysian franchise.

The McDonald’s franchise gave him an immediate credibility. But it was

just the start. In 1980, property consultant Chris Boyd sold Tan his very

first McDonald’s outlet at the corner of KL’s Jalan Sultan Ismail and

Jalan Bukit Bintang. Boyd describes Tan then, `He was an excellent person

to deal with. He was very tenacious, very ambitious and very busy.’

His people agree. Staffers contacted for this story swear by their

group’s chief executive officer and hail him as a generous man. As one of

Berjaya’s 13,000 employees explains, `He knows how to take care of his

people. He’s soft in some ways, and sometimes gets taken advantage of.’

It is a description that flies in the face of contrasting ones by his

critics who see him as a ruthless businessman and paper shuffler intent on

piling one `corporate killing’ on top of another. As one source who

demands anonymity says, `Vincent is a master of using people to get what

he wants.’

In what most analysts now describe as classic greenmail, Tan took on

Multi-Purpose Holdings’ Lim Thian Kiat by going after Magnum Corporation,

the gaming jewel in MPHB’s crown. He kept steadily buying into Magnum

until he stood poised at the 33.3 per cent trigger level for a general

offer.

His standing with bankers had improved significantly by then. This is

illustrated by his RM1.1 billion line of credit from Chase Manhattan to

aid him in his fight for Magnum. Lim eventually bought Tan out for RM310.2

million, and Tan walked away with an estimated RM47 million profit.

With the eventual sale of related paper, Tan says his subsequent total

profit on the deal was probably in the region of RM70-80 million.

Interestingly, at the time, Tan was the toast of Kuala Lumpur for his

seemingly shrewd manipulation of Lim, seven years his junior.

On hindsight, however, most analysts applaud Lim for buying Tan out. Lim

has since transformed Magnum into a jewel of a company that is

superlatively rated by foreign investors. Tan himself admits, `I should

have bought Magnum then!’

Allegations of political patronage are something that Tan has long

learned to live with. He notes, `People … say … I get projects because

I am close to the PM … but would I keep getting projects if I didn’t

deliver?’

Vincent Tan Chee Yioun is, in many ways, an enigma. In the eyes of many

people, he is a ruthless, profit-driven wheeler and dealer. Yet the self-

made man is said to be a closet philanthropist, a businessman who is known

to donate up to RM3 million annually to various charities.

On his part, however, he is quite unperturbed by what people say. Says

Tan, `People may not realise this, but everything I do is with a long-term

goal in mind.’

Copyright 2002

Provided by ProQuest Information and Learning Company. All rights Reserved.