The View | Investors in Li Ka-shing companies now face the big unknown of second generation leadership

One thing is certain about Li Ka-shing’s retirement from the Cheung Kong groups’ two leading companies, namely, despite announcing that he is stepping down Li will continue to be the most important person in the room when any major decision is made.

Indeed this is the major reason why the share prices of the two companies only dropped modestly after last week’s announcement. Investors simply assumed that there would be little change.

Yet, officially, Li will have no title other than that of “senior adviser” but titles mean very little in Asian tycoon-run businesses because whether they are public or private they are operated in a highly centralised fashion either by the founder or his sons or, in extreme cases, by the son-in-law. Female succession is a distinct rarity.

In titular terms Li Ka-shing’s eldest son Victor takes over from him. There was never a scintilla of doubt that this would be the case as his selection was made from a shortlist with just one name on it. Nevertheless this leaves him theoretically in charge of one of Hong Kong’s biggest companies, with literally thousands of shareholders and partners

Even were it the case that Victor Li was the only person truly qualified for this job, he would have a hard job persuading anyone that this was so because he has never been tested against any sort of competition. That includes competition from his younger brother Richard who was once, incorrectly, rumoured to be in the frame before being dispatched with a great deal of cash to start his own businesses.

Moreover Victor Li will be surrounded by the small coterie of senior executives who have been with Li senior for decades. One of the old man’s distinct abilities has been to cultivate enormous loyalty among those around him, this ensured that the most senior echelon of management rarely changed.