Hopewell Holdings Limited

HHL was listed on the Hong Kong stock exchange in 1972. During the first twelve years, chairperson and managing director Sir Gordon Wu focused on property development in the local market. In the early 1980s, Wu saw great potential in the infrastructure development markets of the Asia-Pacific Region's developing economies. He left the highly profitable property development market in Hong Kong and, over the next twelve years, led HHL to undertake highway and electricity-generation projects throughout the Asia-Pacific region. HHL undertook these projects on a Build-Operate-Transfer (BOT) basis. Many impatient shareholders and financial analysts were critical of the HHL's declining economic condition. In October 1997, Wu was forced to make provisions for the potential loss of HK$5.133 billion resulting from HHL's investment in the Bangkok Elevated Road and Train System, a project that was started in late 1990. There were threats from the Thai authorities to terminate the project and new negotiations would have to be conducted with a new, untested cabinet that was formed after the former Prime Minister was toppled because of the currency crisis. The case deals with the difficulties in undertaking infrastructure development projects in developing countries and in maintaining corporate-government relationships.