The Shadow Lords have their origin in the 1937 invasion of China by the Empire of Japan. The Japanese Imperial Army brought coastal China under their control and they were followed by the yakuza as closely as lightening after a storm. All the local criminal groups either fled or were killed.
One of the survivors of this purge was a member of the Green Gang called Fat Yuan. Rumors say that he was half Japanese, the son of a powerful oyabun and his Chinese mistress. As the story goes, he was able to survive and escape the extermination of the Green Gang due to his superhuman abilities and inside information about the activities of those that sought his death.
Fat Yuan fled south before the oncoming Imperial tide and began studying at the monastery of Four Winds outside of Vientiane. When Fat Yuan and his followers stole the mystical shadowknives protected by the masters of the Four Winds, it instigated bloody infighting that saw the destruction of the Four Winds sect and the deaths of the teachers Howling Over Thunder and Crimson Mask.
Lacking the resources to challenge the Yakuza directly, Fat Yuan and his followers traveled the Indonesian Archipelago, Polynesia, and Australia each recruiting their own followers – creating many small gangs that would eventually coalesce into the Shadow Lords. Their ranks were swelled by other Chinese gangsters who had survived the purge, but included a diverse cross section of criminals from across the region. This loose collection of criminal enterprises began to establish their own small spheres of influence in the Madripoor underworld.
The Shadow Lords are essentially cults of personality formed around a specific individual. As such, they usually disintegrate if that leader is killed or removed from power. Experienced members will break off from their parent gangs to establish their own independent outfits with the approval of their former leader. The Shadow Lords are not overseen by a central authority like the Mafia or similar groups.
Despite this lack of top down leadership, conflict between Shadow Lords is rare, unlike the mob wars between Yakuza clans, Mafia families, or Triads.
In contrast to those other organized crime syndicates, the Shadow Lords are small, consisting of fewer than thirty sworn members. Those members control front gangs, larger networks of criminal associations on the street. Due to the necessity of protecting themselves from larger rivals, the members never inform the operatives on the street that they are actually in the employment of the Shadow Lords.
When a group becomes too big and attracts the attention of their enemies, it fragments into two or three smaller groups. By splitting up and recruiting, they evolve and change their face and shape, keeping a low profile.
In essence, the Shadow Lords are a confederacy of criminal outfits that share the same goals. Each leader has their own culture, their own separate hierarchy, and what motivates them may be different, but they all help each other survive while they strike at the Yakuza. Due to their single-minded obsession with hurting the Yakuza, the Shadow Lords have not grown as fast as they could.
The Shadow Lords use every resource possible and are willing to take greater risks than rival syndicates. Compared to the larger crime syndicates, the Shadow Lords are far more likely to cooperate with outsiders. Besides their comfort with magical artifacts, this manifests by the Shadow Lords being one of the few organized crime groups that actively recruits “superhumans”, which are not welcome in more traditional enterprises.