Kwek Leng Beng may be one of Singapore's most successful businessmen, but he is also among the country's most enigmatic. While his companies and brands are blue-chip counters and household names, the man behind one of Asia's largest conglomerates has steadfastly remained reticent and at times mysterious.
In the newly launched book Strictly Business: The Kwek Leng Beng Story, author Peh Shing Huei details the stories behind some of Singapore's biggest corporate deals in real estate and hospitality, as well as the secrets of Kwek's success and the lessons he learnt through setbacks and challenges.
Co-published by World Scientific and The Nutgraf Books, the authorised biography is available at all major bookstores now, and Mothership readers can order a copy here with the promo code “WSMSSB20” for 20 per cent off till Nov. 30, 2023.
An excerpt from Chapter 10, "When Trump Met Kwek" is reproduced here. It tells the story of a face-off between Kwek and former US President Donald Trump over the iconic Plaza Hotel in New York City.
By Peh Shing Huei
Long before Donald Trump descended the golden escalator of his eponymous tower in New York in 2015 to launch an audacious and improbable bid for the United States presidency, he had a far deeper desire that was more posh than political.
Since he was seven years old, he had been fascinated by the Plaza Hotel, nursing a desire that would at once lead him to one of his biggest successes, yet also signpost a humiliating defeat.
Amid dozens of interested buyers, Trump paid over the odds for the Plaza in 1988, handing over US$407.5 million, or US$495,000 per hotel room. It was more than 25 times the hotel’s expected earnings.
Trump borrowed the entire sum, plus some more to cover the costs of the transaction and renovations. It was a risky move which would return to bite him badly. But banks were lining up to throw money at him, with Citibank succeeding with the most, offering a total loan of US$425 million.
But trouble mounted soon thereafter as the real estate market in the United States collapsed in the early 1990s. Trump owed his lenders several billion dollars, and would soon lose his yacht, his private jet, his Trump Shuttle airline, stake in Grand Hyatt New York, and most painfully, his Mona Lisa. By 1992, Citibank had effectively taken over the Plaza from Trump.
When he heard that Citibank had approached Kwek Leng Beng, with Prince Alwaleed bin Talal also interested, Donald Trump focused his firepower on the Singaporean.
His right-hand man Abraham Wallach told him to ingratiate himself with Kwek. “I said to Donald, ‘I think it would be beneficial for you to meet him and see if a deal could be crafted where you’re his partner,’” he told Julie Satow, the author of “The Plaza”.
“You manage the hotel and your position doesn’t really change except you got a partner, but nobody ever listens to who the partner is. All they hear is Trump.”
Kwek agreed to meet Trump in London. Before the meeting, Citibank banker Shaukat Aziz gave Kwek three tips:
- Trump was a wounded animal. Don’t antagonise him further;
- Trump remained very well-connected in New York. Don’t make an enemy out of him;
- Trump had a big ego. Let him save face. Pacify him.
Kwek, a master Asian businessman familiar in the art of giving face, knew just what to do. When he arrived at London’s Lanesborough Hotel for their breakfast meeting, Trump was already waiting for him at the lobby.
He tried to impress the Singaporean immediately. “I just signed an autograph for supermodel Elle Macpherson,” said Trump. Kwek was hardly excited.
Trump continued his charm offensive, giving Kwek an autographed copy of his bestselling book Trump: The Art of the Deal, and when deciding on breakfast, smiled at Kwek and said: “I’ll have whatever you are having!”
Their similarities end with the breakfast choices. While both were, and still are, big players in the global real estate and hospitality, they could not be more different in their approaches to life and work.
Trump was the champion of excesses, both in substance and style, luxuriating in the high life of private jets and the glitz of celebrities.
Kwek was low profile and understated, preferring quiet meals, tennis games, and commercial flights.
Trump loved a good party, especially at the Plaza, where drugs like cocaine were rampant and he was often accompanied by many girls.
Kwek must be in bed by midnight and once jokingly referred to himself in a media interview as “Cinderella.”
Trump made emotional business decisions, such as the purchase of the Plaza.
Kwek placed a premium on being consistently rational when weighing up a bid.
Trump built businesses being leveraged to the hilt, creating an empire sustained on debts. That’s why he lost the Plaza.
Kwek knew not to overextend credit, carefully choosing partners so as to keep borrowings manageable. That’s why he won the Plaza.
Trump was loquacious.
Kwek was quiet.
Kwek’s first impression of Trump in London? “He talks a lot,” he said.
The pair did not hit it off. They were too far apart in temperament and style. Trump kept pushing Kwek to make him his partner in the Plaza. But knowing that the American’s empire was falling apart and almost broke, Kwek politely declined.
Trump changed tack, and asked whether Kwek could let him continue to manage the hotel. Kwek turned him down again, saying that the job was going to Alwaleed’s Fairmont Hotels chain.
But mindful of Aziz’s advice, he gave Trump a face-saving way out. He offered Trump the role of an advisor to the Plaza, with a token fee every year.
“It was to pacify him,” said Kwek.
When Trump failed to convince Kwek to choose him over Alwaleed, he decided to create trouble for the joint venture. When both Kwek’s and Alwaleed’s executives met in New York to discuss the deal, Trump even planted a spy.
When the executives were meeting in the Plaza’s Vanderbilt Suite, Wallach was eavesdropping from a secret room, hidden behind a fake wall.
“They all come to New York, all the higher-ups on the Saudi side and all the higher-ups on the Kwek side, and where do they decide to stay? In the Plaza Hotel, which is still owned and run by Donald Trump,” Wallach said in The Plaza. “They’re so stupid, they’re staying in his property and they don’t have a clue.”
He made a nuisance of himself, hiding in the cramped space for 10 days. When he heard the Singaporeans and Arabs discussing a US$100 million loan they planned to take out so as to buy the hotel, Wallach also called the same bank and asked for a similar US$100 million loan for the Plaza. He confused the bankers.
Trump even pulled the childish stunt of making a fake emergency call, claiming the Plaza was on fire. “You hear FIRE! And then suddenly, all over Fifty-Nine Street and Fifth Avenue, firemen come running into the building with hatchets and hoses, and everybody’s required to vacate the building because (it) is deemed structurally unstable,” said Wallach.
There were days of chaos, when both teams in the new venture were forced to move to another hotel. Trump was proud of his antics. “I drove (Citibank) nuts,” he told the Wall Street Journal. “I did a number on them that you wouldn’t believe.”
Citibank caught wind of his mischief and threatened to withhold his other deals if he continued to stymie Kwek and Alwaleed. Trump finally backed down.
It was only then that the two Asian tigers succeeded in buying the hotel for US$83 million less than what Trump paid seven years ago. Trump’s emotional purchase would turn out to be a very costly error.
But Kwek had one last card in his deck. Having witnessed up close the shenanigans of Trump, he wanted to protect the new venture from more of such.
So the Singaporean insisted that Citibank remained an equity partner in the deal, ensuring that the bank, which was Trump’s main lender, would keep the troublemaker in check.
Top image via Getty Images and The Trump Organisation