35 Years to Build. One Crisis to Lose It. Then Start Again.

In family business, inheritance is often described as receiving an asset. Sometimes it means inheriting a crisis.

The Business of Family describes Dato' Loy Teik Ngan as the eldest son of an entrepreneur who built one of Malaysia's large business conglomerates. Loy took over after his father's death. Within a year, the business empire that had taken roughly 35 years to build collapsed under heavy debt amid the 1998 Asian financial crisis.

The same account says 14 years passed before the family's remaining personal liabilities from the crisis were fully settled. During that period, Loy built a new family business around education. Taylor's Education Group became a major private education group in Malaysia.

The important part is what happened after the collapse

When a large diversified group fails, management can spend years trying to recreate what was lost. Loy's story points to a different response: build around a sector where the family can create a new operating identity rather than merely restoring the old one.

What founders and family businesses can learn

1. Inherited scale can include inherited leverage. The headline size of a group says little about its resilience.
2. Family wealth and business liquidity are not the same thing. A crisis can expose personal guarantees and cross-company obligations.
3. Recovery may take far longer than the crisis itself. One year of collapse can create a decade of repair.
4. The next business does not have to resemble the old one. Reinvention can be more rational than restoration.
5. Stewardship matters more than prestige. Protecting future generations can require difficult decisions in the present.

The iPivot perspective

Family businesses approaching major expansion, leverage or capital-market transactions should understand how obligations move across entities, shareholders and guarantees. Growth is safer when governance, capital structure and succession planning develop alongside the operating business.

Source

• The Business of Family — Dato' Loy Teik Ngan

Independent business-learning commentary. References are for educational and historical discussion only and do not imply affiliation or endorsement.