Lucio Tan (Philippines)

Cigarettes, Beer And Airline Tycoon

Biodata:

BORN: July 17, 1934, in Amoy, Fujian province, China

EDUCATION: BS Chemical Engineering, Far Eastern University, Manila

FAMILY: Married

Lucio Tan is the richest industrialist in the Philippines, with a personal net

worth of at least $1.5 billion. Known to be shrewd but secretive and reclusive,

Tan has extensive investments in China and Hong Kong.

Building an Empire Around Beer and Cigarettes

Over the past three decades, Lucio Tan single-handedly built an empire

spanning the Philippines to Canada, all this while wheeling and dealing firmly

behind closed doors.

Tan was born in China's Fujian province. His family moved to the Philippines

when he was a child. He studied chemistry in Manila, but quit before

graduating to take on a job in a tobacco factory. This prompted the

nonsmoker to start his own cigarette company, Fortune Tobacco in 1966.

The company expanded rapidly, and the introduction of a budget brand,

Hope, in 1975, raked in even greater wealth for Tan.

In the 1970s, Tan secured permission from resident Marcos to establish a brewing

business, Asian Breweries. It was the only brewery allowed to challenge the

supremacy of San Miguel Corp, whose trademark beer dominates the local

market.

In 1977, Tan acquired a defunct bank from the government, and revived it

quickly. Now known as Allied Banking Corp, it is one of the top banks in the

Philippines, and providing sound backing for Tan's foray into brewing and real

estate.

In 1993, he secured control of Philippine Airlines PAL after a bitter ownership

feud.

Connections and the One-Horse Man

In the Philippines, businessmen often contribute significant amounts to

support many different political campaigns, with the hope of gaining

political favour in business no matter who wins the election. Ethnic Chinese

businesspeople, denied the family links to power enjoyed by the

Spanish-descended aristocracy, are some of the biggest campaign contributors.

Connections are undoubtedly an important factor behind Tan’s success.

Tan’s close friend Joseph Estrada rose to become president. But Tan breaks

the mold: he eschews contributing to a bunch of candidates and instead is a

one-horse man. First, it was Marcos; then it was Estrada. Now Tan

is calling some of the big plays for the government as he tries to keep his

airline, Philippine Airlines, afloat.

Tan is also beginning to shed his cloak of secrecy in other ways. For years, he

has held most of his companies privately. Now he is mulling whether to list his

two biggest moneymakers -- Fortune Tobacco and Asian Breweries -- on the

stock market.

Lucio Tan, in full Tan Eng Tsai, (born July 17, 1933, Amoy, Fujian province, China),
Chinese-born Filipino entrepreneur who headed such companies as Fortune Tobacco
Corp., Asia Brewery, Inc., and Philippine Airlines, Inc.

Tan was born in Amoy (now Xiamen), Fujian, China. His parents moved to the Cebu in
the Philippines when he was a child. He was said to have gone to school on barefoot
and first worked as a stevedore who tied cargo with ropes made from abaca[6] He
earned a bachelor's degree in Chemical Engineering from the Far Eastern University in
Manila.[7] Forbes states that while in college, Tan "worked as a janitor at a tobacco
factory"[8] where he "mopped floors to pay for school."[9]

Tan was the oldest of eight children. He studied chemical engineering at Far Eastern
University in Manila. In one of his early jobs, he worked as a janitor in a cigarette factory
before his promotion to tobacco “cook,” regulating the product mix. In 1966 Tan started
his own tobacco company, Fortune Tobacco Corp.

Lucio Tan is the founder and chairman of the $1.1 billion sales LT Group, which has
interests in tobacco, spirits, banking and property development. Tan started as a
chemical engineer at Far East University, where he mopped floors to put himself
through college.

In 1982, Tan established Asia Brewery. Now a subsidiary of LT Group, the brewery was
the only one then to compete with the market leader San Miguel.

In April 2017 President Duterte accused Tan of owing the Philippine government nearly
$600 million in taxes.

 #6 Philippines 50 Richest 2019

 #436 Billionaires 2019
 AGE85
 SOURCE OF WEALTH:diversified, Self Made
 RESIDENCE:Manila, Philippines
 CITIZENSHIP:Philippines
 MARITAL STATUS:Married
 CHILDREN6
 EDUCATIONBachelor of Arts/Science, Far Eastern University
Business interests
LT Group, Inc. (PSE: LTG)

 Asia Brewery, Inc.

 Tanduay Distillers, Inc.
o Absolut Distillers, Inc.
o Asian Alcohol Corporation
 Fortune Tobacco Corporation
o PMFTC, Inc. – 50% ownership by FTC
 Eton Properties Philippines, Inc.
 Philippine National Bank (PSE: PNB) - (merger of Philippine National Bank
and Allied Banking Corporation)
 Victorias Milling Company, Inc. (PSE: VMC) – minority interest and management
control
 Philippine Airlines (PSE: PAL)
o PAL Express
 MacroAsia Corporation (PSE: MAC)
o Lufthansa Technik Philippines - 51% ownership by Lufthansa Technik AG,
49% ownership by MacroAsia,
o MacroAsia Airport Services Corporation
o MacroAsia Catering Services - 67% ownership by MacroAsia, 33%
ownership by SATS Ltd
o MacroAsia Properties Development Corporation
o MacroAsia Air Taxi Services
o MacroAsia Mining Corporation
o Cebu Pacific Catering Services Inc
Others:

 Alliedbankers Insurance Corporation

 Himmel Industries, Inc.
 Century Park Hotel
 Grandspan Development Corporation
  Lucky Travel Corporation
 Foremost Farms, Inc.
 Pan Asia Securities (stock brokerage firm)
 The Charter House (hotel)
 University of the East
 Tan Yan Kee Foundation

Controversies
 LT Group, Inc. (PSE: LTG)
o Asia Brewery, Inc.
o Tanduay Distillers, Inc.
 Absolut Distillers, Inc.
 Asian Alcohol Corporation
o Fortune Tobacco Corporation
 PMFTC, Inc. – 50% ownership by FTC
o Eton Properties Philippines, Inc.
o Philippine National Bank (PSE: PNB) - (merger of
Philippine National Bank and Allied Banking
Corporation)
o Victorias Milling Company, Inc. (PSE: VMC) – minority
interest and management control[10]
 Philippine Airlines (PSE: PAL)
o PAL Express
 MacroAsia Corporation (PSE: MAC)
o Lufthansa Technik Philippines - 51% ownersh
Lufthansa Technik AG, 49% ownership by M
o MacroAsia Airport Services Corporation
o MacroAsia Catering Services - 67% ownershi
MacroAsia, 33% ownership by SATS Ltd
o MacroAsia Properties Development Corporati
o MacroAsia Air Taxi Services
o MacroAsia Mining Corporation
o Cebu Pacific Catering Services Inc.

Controversies[edit]
In 1997, Forbes, in an article entitled "A report card on Asia", complained about the
"considerable corruption still prevalent" in the Philippines, bolstering that claim by citing how
Tan "single-handedly held up a tax reform intended to remove special privileges for local
tobacco and beer producers."[11]
In 1998, Forbes reported that Tan was spending his free time "[j]ousting with the government
over charges of tax evasion" and with Philippine Airlines "shareholders who tried to block his bid
for the airline."[12]
According to the January–March 1999 edition of the Philippine Center for Investigative
Journalism, Solita Monsod, an economics professor at the University of the Philippines and
former Economic Planning Secretary, was quoted as saying that "Lucio Tan is a role model for
the worst kind of conduct as far as our national objectives are concerned. He signals that you
can evade taxes and get away with it, pay the courts and get the judges to decide in your
favour, get good lawyers and delay your cases. The messages that are given by the kind of
treatment that he gets from the Government are the antithesis of what we need for sustainable
development: an even playing field and Government intervention of the right kind." [3][citation needed]
The Presidential Commission on Good Government ("PCGG") originally filed a case against
Tan in July 1987, and has since amended it twice, the last time being on 5 September 1991.
According to the PCGG, the state is entitled to PHP 50 billion in damages and PHP 1 billion in
legal expenses.[4][citation needed] In addition, the state was seeking to recover 60% of Tan's holdings
in companies that Tan held in trust for the former president Marcos – such as Fortune Tobacco,
Asia Brewery, Allied Banking Corp., Foremost Farms, Himmel Industries, Grandspan
Development Corp., Silangan Holdings, Dominium Realty and Construction Corp., and
Shareholdings Inc. – as the PCGG alleges that they were illegally acquired by Marcos using
government funds.[13]
After filing the case in July 1987, the PCGG seized control of Tan’s companies, continuing to do
so until 2006 when the anti-graft court Sandiganbayan nullified the writs of sequestration on
Allied Banking Corp., Fortune Tobacco, Foremost Farms and Shareholdings Inc. The court
ruled the writs had no basis as there was no prima facie proof that any of Tan’s assets were
obtained illegally.
The PCGG soon afterwards filed a petition to the Supreme Court. On December 7, 2007, the
Supreme Court affirmed the decision of the anti-graft court. The Supreme Court found no proof
that Tan, his family, or his various businesses took undue advantage of their relationship with
former President Marcos. Finding no factual basis for the sequestration of the stocks, the
Supreme Court denied the PCGG’s petition, according to a court statement.[14]
In an April 29, 2009 letter filed at the anti-graft court, the PCGG announced that it is "resting its
case" and terminating its presentation of evidence in the PHP 51 billion lawsuit. This, the report
said, came as a surprise as government lawyers had earlier insisted in court that they still have
several key witnesses, including former First Lady Imelda Marcos.[15]