Wang's World

By Matthew Forney/Beijing

In an electronics-research lab in Hangzhou, China, at the Holley Group, one of the most talked about and admired private companies in China, a team of mobile-phone engineers was very busy on a recent weekday morning--busy reading sports articles and playing solitaire and Ping-Pong. One engineer, at least, worked on a circuit board, prying it out of a plastic handset with a box cutter. "This team is young," said a supervisor. "They don't really know what they're doing."

A similar learning curve faces the celebrity executives leading some of China's top private companies. Most came of age during early capitalist reforms, when a cowboy approach made them popular--though their talents sometimes failed them outside China. Wang Licheng, 42, CEO of Holley and one of China's most celebrated executives, typifies the breed.

Wang's pompadour is visible on news kiosks across the country. The Chinese magazine Business World featured his plans to become a mobile-phone magnate. A new book, The Holley Breakthrough, celebrates his firm, best known for selling electricity meters, as "the model of the Made-in-China era." But the greatest awe is for Wang's acquisition of foreign companies, especially public ones, a strategy with great symbolic value in an era in which China wants to assert itself as a global investor, not just an exporter.

Wang's plan to leap into the U.S. was simple: buy a small, listed American firm and move his own operations into its corporate shell. He has used such "backdoor listings" at home by buying a mango packer, shifting part of his meter business to it and renaming it Holley Science and Technology. For his U.S. debut, he chose a struggling, NASDAQ-listed California firm called American Champion Entertainment. Its main asset was a kids' TV show, Adventures with Kanga Roddy, about a karate-kicking marsupial. Wang paid $5 million in early 2001 for a controlling interest. Two months later, NASDAQ delisted the firm for having too low a share price, and it now trades, under a new name, as a penny stock. Wang was stunned. "We had no idea that could happen," he told TIME.

Nothing in Wang's experience had prepared him for his U.S. venture. Like many other Chinese execs, he ad-libbed his way to the top, putting himself through engineering school and working his way up at Holley, then a low-tech but profitable state-run business. He has undeniable pluck--and he needed it when Holley nearly failed soon after he became chairman in 1987. Spurred by Beijing's calls for growth, he created two dozen units that were involved in everything from building roads to bottling water. Soon debts were nearly as big as assets, and the firm was "close to bankruptcy," Wang says.

State-run banks bailed Holley out by lending Wang and his managers money to buy the company. By 2001, he owned 27% of the newly privatized firm and set out to reinvent it as an international tech powerhouse.

After failing to ride Kanga Roddy to riches, Wang paid an undisclosed sum in late 2001 to Dutch conglomerate Philips. He bought an operation that designs mobile-phone handsets and other components and has about 65 employees in Vancouver and Dallas. China's media hailed Holley as the next Haier, the Chinese appliance giant with a factory in South Carolina. But Holley is no Haier. Only a handful of small customers have signed recent deals, and a former manager at the Vancouver office says Holley doesn't have the resources to develop next-generation technology. (A Holley spokesman says the firm will outsource it, if necessary.)

Back at headquarters in Hangzhou, Wang recently sat at a table with some Thai businessmen seeking investment in a phone plant. A TV-news crew had videotaped their arrival. A Thai executive asked whether Holley had reviewed their proposal. "Not yet," he was told. If Holley were to invest, the executive asked, what was its timeline? "The sooner the better!" Wang replied. And with a handshake, China's hottest private company seemed on the way to its next deal.