A Bottle of Sauce and a Book of Law: Five Generations of Lee Kum Kee

Four times a year the members of the Lee family put down whatever they are doing, fly back to Hong Kong, and sit around one table for four days; no one may be absent.

A family five generations deep, worth well over a hundred billion Hong Kong dollars, governs itself under a written constitution. Its rules, known through the retellings of fourth-generation Sammy Lee, sound almost unfeeling: a Lee who wants a job must first work three to five years in someone else’s firm, then apply like any outsider; only blood relatives may hold shares; no divorce, no affairs, on pain of losing your board seat. A family that writes laws against its own affections has usually been wounded by them. This one split twice, in 1972 and 1986; the second time cost Lee Man Tat a mortgaged factory, eighty million borrowed Hong Kong dollars, and a brother who never spoke to him again. The constitution grew from those cracks.

The business grew from an accident. In 1888, in Nanshui on the Pearl River estuary in Guangdong, a young cook named Lee Kum Sheung forgot a pot of oyster broth on the fire and found it reduced to a thick, glossy, deep-brown paste: oyster sauce. Today it sells in more than a hundred countries and holds over seventy percent of the Hong Kong market; when Lee Man Tat died in 2021, aged ninety-one, Forbes put the fortune above seventeen billion US dollars. Joseph Fan, the Hong Kong scholar of family business, found that 250 listed family firms of Hong Kong, Taiwan and Singapore lost nearly sixty percent of their value, on average, around the founder’s handover. Lee Kum Kee is on its fifth generation. The question is how.

The Pot Left on the Fire

In Nanshui a hundred catties of oysters, simmered half a day, yielded barely two of extract. Lee Kum Sheung, fatherless and poor, kept a small eatery there with his mother, and every New Year’s Eve he burned the credit slips his fisherman customers could not repay: debts, he said, must not become the next generation’s burden. He made oyster sauce first and sold it first, and named the signboard Lee Kum Kee.

When fire destroyed the shop he moved toward the shipping lanes — Macau, a transshipment port, in 1902; Hong Kong in 1932. A sauce that wants to travel must first leave the mudflats. It spread without advertising, in the luggage of the homesick Cantonese diaspora, through Chinatown kitchens from San Francisco to Singapore. By mid-century it was a revered name overseas and still a small workshop, minded by the founder’s three sons, Lee Shiu Wing, Lee Shiu Tang and Lee Shiu Nan. Slowness had one mercy: a recipe and clientele unchanged for decades left room for twenty years of quarrels.

Two Buyouts and a Silence

The transformer was Lee Shiu Nan’s son Lee Man Tat, born in Macau in 1929, raised in the shop. Joining in the 1950s, he found a company that earned but could not grow: several branches shared one pot, and none would gamble steady dividends on expansion. Around 1972 the argument ended in money — he and his father bought out the dissenting uncles for about HK$4.6 million — and at forty-odd he finally had a company he could run.

The second split was crueler. His brother Lee Man Lok, the only other major shareholder, wanted safety where he wanted speed; after a cancer diagnosis around 1982, Man Lok’s wife pressed to cash out rather than leave the fortune inside a company the elder brother controlled. The brothers ended up in court. Around 1986 Lee Man Tat mortgaged the Wong Chuk Hang factory, borrowed to the edge of bankruptcy, and paid about HK$80 million for his brother’s roughly forty percent. The shares were settled; nothing else was. Their father died in 1988 watching his sons live as strangers; the bought-out line vanished from the family’s told history. “To this day it pains me deeply,” Lee Man Tat said of the brother who never spoke to him again.

The curve is cold — 4.6 million, then 80 million — each buyout making the company more valuable and the next quarrel dearer, until a third might be one nobody could afford. Blood cannot bind a family, and even the strongest patriarch exits; what is needed is a rule that binds the patriarch too and works after he is gone.

A Panda at the Supermarket Door

When Nixon’s 1972 visit sent two pandas to America, Lee Man Tat named his North American oyster sauce “Panda Brand,” a state gift turned free endorsement. A laborer earning ten Hong Kong dollars a month could afford five-odd bottles, no mass market at that price, so cauldrons gave way to industrial lines, and a California factory followed in the early 1990s.

Under him the name stopped meaning one sauce. Soy, hoisin, chili, black-bean, garlic, XO: the line grew past three hundred products in more than a hundred countries, and from 2007 to 2012 it was the world’s best-selling oyster sauce brand. His quality law, one hundred minus one equals zero, held that one failed link voids everything: one bad bottle costs a century of signboard. The sauces flew to orbit with the Shenzhou missions, fifteen of them by 2023, and in 1996 the group built its largest base at Qibao in Xinhui, the ancestral county the founder had left. Repeating 1986 would now cost generations of work and a hundred-year brand.

Writing the Family Law

The push came from a third near-rupture. Lee Man Tat deadlocked with his youngest son, Sammy, over selling a loss-making business; the standoff lasted two years; Sammy considered leaving for good. Uncles, brother, now son — and a son cannot be bought out without severing the succession. The aim, in Sammy’s later phrase, became to treat the crisis before it erupts.

The second son, David Lee, toured long-lived family firms in Switzerland, Britain, America and Japan. Around 2002 the family created a family council and began drafting a constitution. The council seats seven — Lee Man Tat, his wife, and their five children — and meets quarterly for four full days, attendance compulsory, latecomers reportedly fined, the patriarch not excepted. Each child ran a front — Eddy Lee the sauces, Sammy health products, Charlie Lee investments, David overseas markets, their sister Elizabeth Mok the next generation’s training center — the four days spent on values, the constitution, relationships, ownership and the young. The family council governs the family, the board the business, professional managers the operations, under Sammy’s formula: on the family platform, as if there were no business; on the business platform, as if there were no family.

No outsider has read the constitution; everything known comes from Sammy’s retellings: finish university, work three to five years elsewhere, then compete for entry on an outsider’s terms; only blood relatives hold shares, and whoever wants out is bought back on pre-agreed terms; spouses stay out of management; executives retire at sixty-five, council members at seventy; do not marry late, do not divorce, keep no affairs; amendment takes more than three-quarters of the council. Each ban sits exactly where the family had torn, or could tear.

Joseph Fan offers two tests: the process matters more than the paper, and a constitution is real only if its author has been bound and overruled under it. Here a patriarch who had bought out uncles and brother made himself finable and outvotable; the patriarch submits first, and only then does the law stand. Its legal teeth live in shareholder agreements, trusts and articles; behind the constitution itself stands only the family’s belief. Nor was it foresight: after three near-ruptures, it was repair.

The Business That Dropped the Name

Lee Man Tat’s other dream, spreading Chinese wellness culture, fell to Sammy. In 1992, with the First Military Medical University, the family founded Southern Lee Kum Kee and entered health products. Its 1994 flagship, an immune-support oral liquid built on a compound-polysaccharide formula of lingzhi and poria, moved more than seven billion vials; in 2007 the firm won one of China’s first direct-selling licenses and renamed itself Infinitus, and by about 2015 it booked nearly 26 billion yuan a year, first in Chinese direct selling and briefly the equal of the century-old sauce business.

But direct selling drifts from selling products to recruiting people, and supplements swell into cures. After a rival’s collapse triggered a national crackdown in late 2018, a Shaanxi mother went public: on a distributor’s advice her three-year-old daughter had dropped prescribed medicine for supplements and months later showed myocardial damage. Branches were fined for false advertising and out-of-scope selling; the company apologized; the license survived, the multilevel model unchanged. Revenue fell from nearly 26 billion yuan to around 10 billion by 2023: the regulators’ fines came to a few million yuan, the market’s to more than ten billion a year.

The episode marks the constitution’s boundary: it governs inside the family gate, and the “others” of the family creed meant kin, shareholders and partners, never the stranger paying for the product. One hundred minus one works in a sauce plant, where the company grips every link; it fails across several hundred thousand distributors no family creed can bind. And the venture born wearing the surname later took “Lee Kum Kee” off its signboard: nothing in health products can now burn the hundred-year sauce brand.

The Thousand-Year Plan and the Reluctant Fifth

Sammy set the family a goal that sounds like fantasy: a thousand years. In the 130th-anniversary film of 2018, Lee Man Tat said: “Our ambition is that this family business continue without end, beyond a thousand years.” Behind the slogan is full separation: the family one day exits management, keeps ownership and governance, and lets professionals run the firm. Sammy’s book names the mode Autopilot, Cantonese for an automatic gearbox; he sometimes stays away for months while the business runs, and in late 2020 the sauce group’s chief executive chair went, for the first time, to non-family professional Lam Pik-po of KPMG and PepsiCo.

But the finest design needs takers, and the fifth generation is not sure. A Kellogg teaching case records that by 2013 only two of its fourteen members had joined the company; the annual retreat was suspended in 2011 over “apathy, and certain potential conflicts,” and one member asked off the company’s email lists. The case named the dilemma engagement versus entitlement — hard-won unity can look, from below, like a yoke nobody applied for. The answer was to trade requirement for attraction — board internships, trips to founders, a venture fund called Happiness Capital courting the young — all resting on what no institution can manufacture: a generation’s voluntary choice.

The doctrine, moreover, has one voice: David built the frame, but the books and the “thousand years” are mostly Sammy’s — long-lived families curate their own story. Sammy concedes the fragility: descendants may amend any clause, and the constitution binds only while a generation believes it; the day belief stops, it is paper in a drawer.

Lee Man Tat died in July 2021. The obituaries crowned the “Oyster Sauce King,” counted Hong Kong’s sixth-largest fortune, and did not mention the brother. That same year the family added a shareholders’ committee beside the council, splitting “family member” from “shareholder.”

What the Design Proves

Tagiuri and Davis’s three circles — family, ownership, business — breed chaos wherever one person speaks from two at once; Lee Kum Kee built a room for each: council, shareholders’ committee, board. One precondition is easy to miss: unlisted, the ownership circle holds family only. Hirschman gave the discontented three roads — exit, voice, loyalty — and the constitution paves all three: quarterly days of voice that count, exit at a pre-agreed buyback price, loyalty built by creed and retreats; 1986’s improvised near-ruin became a priced procedure. The price of the paved roads is freedom: spouses shut out of equity and management, private love written into governance, years in another’s firm before your own family’s.

A sibling model chose the opposite door. In 1917 eight Japanese soy-sauce families merged into what became Kikkoman under a code and council of their own, capping how many kin may enter the firm and adopting able sons-in-law to keep the helm with talent. Kikkoman keeps family out of the firm and lets outsiders into the blood; Lee Kum Kee raises the entry bar, paves the exit, and reserves shares for blood alone. Both point one way: longevity lies not in gripping blood tighter but in negotiated space between blood and business. The fashionable praise gets it backwards: the family has not transcended blood — blood is the one qualification it will not waive — it merely refuses to believe blood produces harmony by itself. The rules do not replace kinship; they protect it.

The creed arrived as a gift: in 1960s Taiwan the calligrapher Liu Taixi gave Lee Man Tat a scroll, and he framed its last four characters — Si Li Ji Ren, consider others’ interests — keeping them on his office wall for decades, an “alarm clock” asking what the other side would gain. His grandfather had practiced it nameless, burning the credit slips each New Year’s Eve. The phrase is said to come from Yan Zhenqing’s Tang-dynasty letter rebuking a breach of seating protocol: a text about keeping seats in order, become the creed of a family that twice split over seats.

Five generations of work come down to two artifacts: a bottle of sauce and a book of law. The sauce is the founder’s, carried from the mudflats through Chinatown kitchens and American supermarkets to, at last, a spacecraft. The law is the later generations’, paid for at 4.6 million and then 80 million Hong Kong dollars, a brother lost, a father who died grieving — and written so that its own author had to obey it. In 2026 Eddy Lee chairs the group, an outsider runs the sauces, and the fifth generation has not yet said yes or no; four times a year the family still sits down for four days, a reminder that a family around one table is nothing to take for granted. The thousand-year plan is one hundred and thirty-eight years in; how far it goes depends on whether those still to come believe the law.