Taiwan family feud
The late Taiwanese billionaire Wang Yung Ching (Y. C. Wang), founder of Formosa Plastics, was the son of a lowly tea grower whose roots came from southern China. Y.C. Wang barely finished sixth grade, but he was a born entrepreneur.
In the 1930s, when Taiwan was ruled by Japan, he sold rice for a few dollars a month at the age of 15. He later opened his own rice shop. After the war, he successfully ventured into the timber market. In the 1950s, using his connections to the Chiang Kai Shek government, plus a US government grant, Y. C. Wang entered the plastics industry, and the rest is history.
With shrewdness and perseverance, Y. C. Wang was on his way to becoming a billionaire. Formosa Plastics was founded in 1954, Nan Ya Plastics in 1958, Formosa Chemicals and Fiber Corp. in 1967, Formosa Petrochemical Corp. in 1992. In the 1980s, these companies invaded the US market.
- C. Wang was not the only entrepreneur to combine petrochemicals with PVC plastics. But where others’ efforts failed, his enterprises flourished. Extremely thrifty, Y. C. Wang founded the fiber company in order to produce rayon fibers from timber waste.
Entrepreneurs are generally very hard-working, but Y. C. Wang took labor to new heights. He reputedly worked more than 100 hours a week and met with managers daily, including weekends, and demanded that employees show similar dedication. Unfortunately, not everyone could keep up with him, and many soon developed nervous disorders dubbed “the Formosa Plastics syndrome.”
The conglomerate has also been embroiled, off and on, in bribery allegations, pollution, and various environmental, labor, safety problems.
No filial piety
Demanding of his employees, Y. C. Wang did not spare his family. In 1935, he married Yueh-Lan, but when she could not bear a child, he took Wang Yang Chiao as a mistress. The two women were reportedly amicable and both lived under the same roof in Taipei, soon filled with the latter’s five children: Winston, Margaret, Charlene, Cher, and Walter.
To complicate matters, Y. C. Wang took a second mistress, bar hostess Pao Chu Lee, with whom he would have another four children: Susan, Diana, Lora, Sandy. The relations between the third family and the earlier ones were always strained, to this day.
In the 1980s, the question of succession could not be avoided. Though Y. C. Wang was still strong, his younger brother Yung-Tsai Wang (Y. T. Wang) was the second in command.
The next generation were educated at top schools and carefully groomed for top positions, specifically Winston and Y. T. Wang’s eldest son William. Y. C. Wang did not seem to discriminate among his families: Cher headed a lucrative computer company, Susan the US plastics division.
Trouble was brewing. Y. C. Wang’s children at times resented their father’s micro-management. Charlene, who eventually made a name for herself in First International Computer, deliberately chose to go to the computer industry because it was “something he [her father] knew nothing about.”
Walter assumed he would lead the pipe division upon the transfer of its head, so he moved into the latter’s office—but he was forced to vacate the room by his father.
Things erupted in 1995, when elder brother Winston, the heir apparent, defiantly continued with his extramarital affair with a graduate student in Taiwan University. He was exiled to the US for a year, but upon his return, he was branded as an unfilial son. For many Chinese parents, this was the ultimate sacrilege, and Winston was booted out of the family business.
Winston struck out on his own, founding industrial firm Grace THW that same year.
No will
Family succession was doomed. Perhaps he was in denial, perhaps he was just too busy, or perhaps he was too tired to care. But Y. C. Wang died in 2008, without making a will. Chaos ensued.
The (one and only) legal wife Yueh-Lan brought suit against second mistress Pao Chu and her family in order to secure what she believed to be her rightful share. In 2012, the US judge found the case to be without merit.
In 2013, Winston, eldest of the first mistress Yang Chiao, notwithstanding his pariah status, supported Yueh-Lan and brought similar suits against his father’s other mistress.
Walter, though battling cancer, heads JM Eagle, a part of which his father ordered him to buy in 1995. Margaret still works for Nan Ya. The other children are doing well but today, the chair of Formosa Plastics Group is Lee Chih-Tsuen who, although capable, is not a family member.
Next week: A Filipino learning center is born
Queena N. Lee-Chua is on the board of directors of Ateneo de Manila University’s Family Business Development Center. Get her book “Successful Family Businesses” at the University Press (e-mail [email protected].) Email the author at [email protected].
