Fala Chen’s Ex-husband Daniel Sit’s Family Faces Financial Stress
Neway, the family business of Fala Chen’s (陈法拉) ex-husband Daniel Sit (薛世恒) is now on the brink of winding up. The largest karaoke operator in Hong Kong, which saw declining revenue due to the pandemic, owes three major record labels 90 million Chinese yuan in debt. The creditors have applied for liquidation of Neway Music Limited, a subsidiary of the chain karaoke operator from the courts.
Founded in 1993 by Christopher Sit (薛济杰) with its first location in Tsim Sha Tsui, Neway quickly gained a large market share and grew to become the trendiest go-to karaoke spot in Hong Kong over the last 30 years. Part of its rise was due to the popularity of karaoke at that time as the default entertainment for youths, while it also met the golden age of Hong Kong music industry, with quality Cantonese tunes being produced regularly, which led to booming karaoke demand.
Rivalry Among Brothers
However, Neway’s downward spiral sneakily started since Christopher Sit handed over business operations to his sons. His elder son, Daniel Sit married then-popular TVB actress Fala Chen while his younger son Ernie Sit (薛嘉麟) married supermodel Marie Zhuge (诸葛紫岐). Aside from the alleged rivalry between Daniel and Ernie, there were also rampant reports of Fala Chen and Marie Zhuge fighting for favor.
The elder Mr. Sit was apparently annoyed by Daniel’s focus on romantic relationships during the financial tsunami, and aggrieved at his inept handling of the company, partly due to the poor performance of its subsidiary Star Entertainment, which caused the group to bleed losses. Daniel and his father’s public spat also affected the business.
Eventually, younger brother Ernie was made heir. Unfortunately, Ernie lacked his father’s drive and acumen, and was more interested in enjoying the perks of a wealthy lifestyle than managing the business efficiently.
Gloomy Fate
The poor management of the business – its dependence on aging tunes in its library instead of focusing on acquiring exclusive rights to trending new songs – meant that it had been unable to attract patrons, while pandemic regulations at karaoke lounges further shaved its profits.
Its outlet numbers shrank from 29 to just 14. Worse yet, its remaining lounges have been unable to maintain daily operations nor pay its employees. In April, Neway put 500 employees on furlough.
Once raking in CNY 1 billion a year, the now struggling karaoke chain was unable to pay the CNY 90 million license fees it owed Sony Music Entertainment Hong Kong, Warner Music Hong Kong and Universal Music. Unable to clear outstanding debts for five years, Neway was taken to court by creditors, who demanded liquidation of its assets.
The case is scheduled for a hearing on July 28, 2021.
Sources: Sina, Bastille Post
This article is written by JoyceK for JayneStars.com.
Marie Zhuge Continues to Live Luxuriously Despite Husband’s Financial Troubles
Sounds like two incompetent sons with very poor taste in women………..Actually, not just poor, but also cheap taste too.
@yuaida marrying such useless heirs reflects cheap taste of these women.
I remember reading a statistic that something like 40% of family businesses fail past a second generation, and something like 90% fail by the end of the third generation. Sounds about right. Just because the first generation of the family has the business sense, doesn’t mean its necessarily inherited by the second gen. Heck, look at Warren Buffet. His successor isn’t even related to him by blood.
@theyenman
It’s very tough to sustain a business in the rapidly changing environment. There might have been a karaoke boom in the 90s but decisions to venture elsewhere would have been the key to match new trends…
@theyenman
i used to think that is true and there is also a chinese saying wealth doesn’t surpass 3 generation and poort doesn’t surpass 3 generation. however, that is no longer true. if you look at the super riches, i meant the ones that you don’t hear about in the news families with old european roots like vanderbelts, rothchild etc. their wealth keeps growing w/o having them to do anything. watch the documentary “born rich” those are kids from multi generation of wealth and they don’t have to do anything. they could just couch up somewhere and money would keep rolling into their bank accounts. most notable, donald trump’s wealth was passed through multi generations of old $$.
@theyenman Also could be the way the kids were raised, if they weren’t raised with a mindset of continuing the family business and just playing all the time then yeah….
I thought the brother is Sharon Chan husband and Sharon on the picture or it could be Eason Chan? Maybe it’s just me.
Wow, y’all are harsh. So many businesses that rely on the public in these past two years have closed due to pandemic. Some might’ve closed due to improper management, but some closed purely because people aren’t going anywhere. Where’s the business there?
@coralie
Yeh. Agree. Could be many reasons for failure of a business. From current situation/market to the change entertainment trends etr. The bosses be doing a great job but are helpless in saving the business. If a business is in severe debt, it can’t be turnaround with a just few management decisions
@coralie “Unable to clear outstanding debts for five years, Neway was taken to court by creditors, who demanded liquidation of its assets.”
The pandemic was just a catalyst that sped the nail to the coffin. Their business has been struggling pre-covid since they have owed creditors for 5 years.
if all they do if cantonese music then the place is going no where. i can’t really name any recent famous cpop song though i haven’t been paying attention to cantopop in the last decade or so. who’s new and popular right now in HK? mirror? so much competition from china and korea. sorry mirror fans, but they can’t compete with the overseas truthfully.
@m0m0 It is another perfect example of an existing business that is unable to keep up with changing times.