HONG KONG - When residents of Banyan Garden in Kowloon moved into their new homes built by tycoon Li Ka Shing's Cheung Kong Holdings 10 years ago, they realised their connection with Asia's richest man did not stop there.
The estate management company they had to use was a Li Ka Shing business. Their phone and broadband services were provided by a Li Ka Shing telecoms operator.
It may have struck some as a rather incestuous set-up by a powerful conglomerate, but there was nothing illegal about it. The residents complained but the Hong Kong authorities, without the cudgel of a competition law, was powerless to act.
This could change for Hong Kong's tycoons in the coming years.
In June last year, after seven years of wrangling, Hong Kong finally joined most developed economies in passing a Competition Law which, on paper at least, aims to crack down on anti-competitive cartel behaviour like price-fixing.
It also prohibits companies with "a substantial degree of market power" from abusing it to restrict competition - a rule that Cheung Kong's conduct in the Banyan Garden case might fall under.
"The law will help us clean house," says law academic Thomas Cheng, a member of the commission drafting the guidelines to flesh out the law. It is expected to be implemented in a year.
So when news broke last month that Mr Li was putting his Parkn- Shop supermarket chain on the block, some guessed it might be because the end is nigh for legal cartelisation.
As one of the city's two grocery giants that effectively exercise a duopoly with 70 per cent of the market, ParknShop is, as Mr Lam Woon Kwong, convenor of the government's executive council, puts it, "a cash cow".
It is an open secret that most suppliers have to pay a fee for their products to be placed on the shelves, he observes. Meanwhile, high rents keep small players out.
So while some analysts point to the maturing grocery market and say the sale is driven by purely commercial reasons, others read in Mr Li's decision his belief that winds are blowing through Hong Kong that make it just a little less cosy for the fabled tycoons.
Aside from the Competition Law, there have been other moves to strengthen consumer and workers' rights, including a minimum wage, the disclosure of accurate information in property sales, and action against misleading sales tactics.
Talks on standard working hours are ongoing.
At a more visceral level, increasingly politicised Hong Kongers - chafing at the yawning income gap and social immobility - have become, as economist Francis Lui asserts, "anti-rich". A strike in April by dock workers for higher wages drew public sympathy with calls for a "class war".
Says Mr Lau Ming Wai, son of property magnate Joseph Lau, and vice-chairman of developer Chinese Estates: "Hong Kong is transitioning.
The business environment has changed, which makes it more difficult (for conglomerates) to make money."
Since its colonial days when the British doled out lucrative concessions and contracts to a few favoured companies, Hong Kong has been famed for its concentration of rich and powerful taipans.
A 2000 World Bank report found that Hong Kong's top 15 families controlled companies with a market capitalisation equal to 84.2 per cent of its gross domestic product in 1996.
At the top of the heap was Mr Li, dubbed Superman for his financial perspicacity and having fingers in almost every pie from property to ports.
The modus operandi is straightforward: As Mr Lam notes, the government - the sole owner of land - has a "tendency to collude with property developers to keep prices up". This rakes in revenues while keeping taxes low, and also props up public confidence in the economy.
One fifth of its revenues last year - HK$85 billion (S$13.9 billion) - was from land-related income. Coupled with tight land supply, this makes the market "easy prey" for a few big developers with deep pockets, while squeezing out smaller players. With their profits, they then corner commanding positions in the economy.
Meanwhile, high property prices and rents lead to a "vicious upward spiral" in consumer goods prices, says Ms Alice Poon, who worked for tycoon Kwok Tak Seng, and is author of the book, Land And The Ruling Class In Hong Kong.
Increasingly resentful of this state of affairs, Hong Kongers are now pointing fingers at the tycoons, says Mr Bernard Chan, whose grandfather Chin Sophonpanich founded Bangkok Bank, Thailand's largest bank, and who is today president of his family's insurance business Asia Financial Holdings in Hong Kong.
"Too much money, people say, you have too much money," he says, recounting what people say of the taipans.
Impending universal suffrage also means the government is forced to respond with more populist policies.
Notes Mr Lau: "With electoral politics, government policies will be less business-friendly. How businesses feel will not be the government's first consideration; it will be the electorate."
Yet another factor throwing the balance of power off is the muscling in of Chinese state-owned enterprises (SOEs), armed with financial resources and backed by mainland political interests.
For instance, Vanguard, owned by China Resources, has thrived as the third-largest player on the supermarket scene, succeeding where others like France's Carrefour failed. In June, China Overseas Land & Investment won the tender for sites under the "Hong Kong land for Hong Kong people" scheme by bidding above estimated prices.
Mainland entities now account for almost half the 50 companies listed on the Hang Seng Index. There are 23, of which 20 are SOEs.
Says Mr Lau: "The landscape has been changing from this so-called 'tycoon economy' in that more and more state-backed companies are entering Hong Kong as a competitive force."
Such concerns appear to be borne out by a recent article in the 21st Century Business Review magazine of the Nanfang Daily Press Group. It said Mr Li is selling Parkn- Shop because he "can no longer dance around Hong Kong's politics" and adds: "Mr Li should understand that from the mainland's perspective, he is merely a private businessman."
Business patriarchs, especially Mr Li, were known to have the ear of Chinese leaders in the past, notably former president Jiang Zemin.
"It is an open secret that Beijing used to secure the backing of local tycoons to support its political stand, and in return 'tolerate' their near monopoly control of the local market," says Mr Lam.
But this might be changing, he adds, after the last chief executive race when Mr Henry Tang, who had the tycoons' backing, was embroiled in scandals. It is also unclear how new Chinese President Xi Jinping views the tycoons.
Mr Chan, who sits on the board of China Resources, says SOEs have certainly changed the game, though they still trail the taipans in areas like real estate.
For Hong Kong's first-generation tycoons, there is also that immutable fact of life: death. Notes popular blogger Hemlock, who works for a mogul: "Most are in their 80s at least. Their sons will face a tougher environment, and in many cases are probably not as talented as their fathers."
Not an epitaph
But this is not an epitaph to the tycoon dynasties.
As it is, their continuing political heft means that new laws unfavourable to their interests tend to be more annoying than catastrophic.
The Competition Law, for instance, may bar egregious anti-competitive behaviour. Take land auctions, long dogged by rumours that developers rig bids before divvying the spoils. But hard evidence is required to prosecute - and gathering this will be tough.
More fundamentally, their goldmine - high land prices - is unlikely to disappear soon.
Says Mr Chan, an executive councillor: "There is zero consensus on reforming how land is priced and sold. People don't want to pay higher taxes."
On their part, the tycoons are shifting to entrench their hold.
Many are burnishing their image to counter public perception of them as rapacious businessmen.
"The tycoons are aware that they have to be more sensitive," says Mr Chan. "In the past, they were just taking and not giving. But the new generation is becoming more responsive, giving to the needy and the arts."
Mr Lau similarly says "companies have to behave more sensitively to present themselves in a more positive light" though he stresses that his passion for corporate social responsibility is independent of such considerations.
In the 1950s, many of these tycoons fled communist China for Hong Kong. They survived and thrived then, and odds are that they will continue to do so.
As Mr Chan says: "Hong Kong businessmen are very adaptable. We have to keep adapting, just as we did in the past. The scale is different, but really, it's nothing new."
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