In Hong Kong, we build a global business empire

Chapter 663 Responding to each move with a counter-move, blocking every attack!
After Bank of East Asia and Standard Chartered Bank reached an agreement on the cooperation, legal departments and key senior personnel from both sides quickly arrived at the scene and formally negotiated the details of the contract in a conference room at Bank of East Asia's headquarters.

Standard Chartered Bank was particularly proactive in this process.

After all, such a cooperation opportunity is extremely rare, a once-in-a-century opportunity.

If Standard Chartered misses this opportunity, it may never have another chance to acquire HSBC.

After more in-depth negotiations, the contract clarified the specific terms, responsibilities, obligations, and profit distribution of the cooperation between the two parties.

In fact, the contract mainly focused on the benefits that Standard Chartered Bank conceded.

For example, the contract clearly stipulates that Standard Chartered Bank must help Bank of East Asia obtain the right to issue banknotes within three months. If this is not achieved, Standard Chartered Bank must compensate Bank of East Asia HK$30 billion.

This high compensation clause was actually proposed by Lin Haoran to prevent Standard Chartered Bank from reneging on its promise after successfully acquiring Huifeng Bank, or from deliberately delaying and failing to fulfill its commitment.

Initially, Mr. Brown strongly opposed this clause, after all, HK$30 billion was no small sum, and if it triggered compensation, it would be a heavy financial burden for Standard Chartered Bank.

However, Lin Haoran and He Shanheng remained firm and refused to back down.

They all understood that the financial market was volatile, and if Standard Chartered Bank really wanted to play tricks and deliberately fail to fulfill its promises, wouldn't Bank of East Asia suffer huge losses?
Therefore, this compensation clause is crucial to protecting the interests of Bank of East Asia and should not be easily compromised.

Although a bank's reputation and word-of-mouth have always been fundamental to its market position, these agreements are ultimately just commercial agreements.

Even if Standard Chartered Bank ultimately fails to fulfill its obligations, it may not cause much of a stir in public opinion.

However, the compensation clauses clearly stated in black and white in the contract are entirely different in nature.

If Standard Chartered Bank is unable to fulfill the relevant terms, it will actually owe Bank of East Asia a debt of HK$30 billion, a debt that Standard Chartered Bank cannot evade even if it wanted to.

Left with no other option, Mr. Brown had to call Standard Chartered Bank's UK headquarters.

Surprisingly, after a brief discussion, the senior management at Standard Chartered Bank headquarters agreed without hesitation.

According to Mr. Brown, Standard Chartered Bank seemed confident in helping Bank of East Asia obtain the right to issue banknotes, which is why they ultimately decided to agree to the agreement. After all, once the conditions were met, the compensation would naturally become an empty promise that did not need to be cashed.

In addition, the contract clearly stipulates that if Standard Chartered Bank successfully acquires Huafeng Bank, it must immediately transfer the shares of Hang Seng Bank held by Huafeng Bank to Bank of East Asia.

Initially, Standard Chartered Bank intended to sell these shares at the stock market price, but Lin Haoran felt that this was inappropriate.

After all, the share price of Hengsheng Bank is severely overvalued.

At its peak, Huifeng Bank had a market capitalization of approximately HK$260 billion, while its subsidiary, Hang Seng Bank, had a market capitalization of over HK$150 billion during the same period.

It should be noted that at the time, Huifeng Bank had a capital scale of over HK$1300 billion, while Hengsheng Bank's capital scale was only around HK$250 billion. Such a huge difference in capital scale and market value is enough to show that Hengsheng Bank's stock price was inflated.

Today, the entire Hong Kong banking industry seems to be "bleeding" by Bank of East Asia, with the share prices of several major Hong Kong-listed banks, such as Huafeng Bank and Hang Seng Bank, continuing to decline.

Even so, Hang Seng Bank's current market capitalization is still approximately HK$70 billion.

If the acquisition is indeed carried out at this share price, and Huifeng Bank currently holds 62.14% of Hengsheng Bank's shares, wouldn't Lin Haoran have to pay out HK$43.5 billion?
He naturally wouldn't agree; how could he willingly become such a sucker?

Lin Haoran proposed to acquire 62.14% of the shares of Hengsheng Bank for HK$10 billion.

In the office, the two sides engaged in a long and heated discussion about the price, with both dissatisfied with the price offered by the other.

Lin Haoran remained resolute and unyielding, clearly stating that if an agreement could not be reached on the price, the cooperation between the two parties would have to be terminated.

Ultimately, both sides compromised and reached an agreement. Once Standard Chartered Bank successfully acquires HSBC, Bank of East Asia will acquire HSBC's 62.14% stake for HK$15 billion. This condition was also written into the contract.

In addition, He Shanheng was responsible for overseeing the contract terms related to international financial resource sharing.

The entire signing process was lengthy and protracted, with representatives from both sides engaging in heated debates for nearly three hours before finally reaching a result that satisfied both parties.

Meanwhile, while Huifeng Bank's senior management remained completely unaware, Bank of East Asia and Standard Chartered Bank had quietly completed their acquisition, "dividing" the company up completely.

Who could have predicted that Huifeng Bank, once a dominant force in Hong Kong's financial industry and even the entire business world, would now be like a fish on a chopping board, at the mercy of Bank of East Asia and Standard Chartered Bank?

Of course, how Standard Chartered Bank secretly undermined HSBC and how it forced the consortium behind HSBC to hand it over were all Standard Chartered Bank's own "methods" and had nothing to do with Bank of East Asia.

In this game, Bank of East Asia only needs to cooperate with Standard Chartered Bank at the right time to exert the necessary pressure on HSBC.

Lin Haoran was naturally delighted with this, since he was currently shorting Huifeng Bank and still owed a considerable amount of stock to some of Huifeng Bank's shareholders.

The lower the share price of Huifeng Bank, the lower the cost of his buybacks, and thus the more he earns.

Once Huifeng Bank is hit by various adverse factors, its stock price will inevitably plummet further, and its profits from short selling will be extremely substantial.

Every move Standard Chartered Bank made to "stab" Huifeng Bank was like handing Lin Haoran a sharp "blade," helping him to be invincible in the battle against Huifeng Bank and reap huge wealth.

Once the contract was signed, the atmosphere in the meeting room instantly became relaxed and harmonious.

Mr. Brown slowly stood up, a sincere smile on his face, and extended his hand to shake hands with Lin Haoran and He Shanheng respectively.

At the same time, he said warmly, "Mr. Lin and Mr. He, I sincerely hope that our cooperation can proceed smoothly and achieve a win-win situation. In the future, we will work together in the Hong Kong financial sector and create brilliant achievements together."

Lin Haoran and He Shanheng also quickly stood up and shook hands with Mr. Brown with smiles on their faces.

Lin Haoran responded with a smile: "Mr. Brown, we also look forward to a deeper and longer-term cooperation with Standard Chartered Bank. We believe that with the joint efforts of both parties, we will surely reap greater benefits in Hong Kong's financial industry."

He Shanheng smiled and nodded: "That's right, this cooperation is of great significance, and I hope that all subsequent matters will proceed smoothly as planned."

After Mr. Brown left, Lin Haoran and He Shanheng sat down again, exchanged a smile, and were both very satisfied with the outcome of the negotiations.

Standard Chartered Bank has been making concessions time and again, which shows how anxious they are about this matter.

Once Standard Chartered Bank acquires HSBC, its market share in Hong Kong will increase significantly!
It can be said that Lin Haoran and his team seized upon Standard Chartered Bank's weakness, which is why Standard Chartered Bank had to make many concessions in this negotiation.

"Haoran, this time we've really got Standard Chartered Bank figured out and have it completely under our control." He Shanheng leaned back in his chair, a smile on his face. "However, we can't let our guard down."

Standard Chartered Bank has managed to stand strong in Hong Kong's financial world for so many years; they must have some tricks up their sleeve. Of course, they probably won't dare to act recklessly before completely acquiring Huifeng Bank.

Lin Haoran nodded slightly, a faint smile playing on his lips: "I've dealt with British companies quite a few times, and I know their tricks inside and out."

So, I never considered Standard Chartered Bank a true ally. This cooperation was just a temporary alliance for both sides to pursue their own interests. Uncle He, you've been with Huifeng Bank for so many years, you must know the working style and hidden tactics of British companies better than I do.

Next, you need to assign a few capable people to closely monitor Standard Chartered Bank's every move in acquiring Huifeng Bank, especially key information such as their communications with the consortium behind Huifeng Bank and the terms of the transaction. We can't allow Standard Chartered Bank to engage in any underhanded tactics that could harm our interests.

As the saying goes, two tigers cannot share one mountain.

Once Standard Chartered Bank successfully completes its acquisition of HSBC, its ambitions will surely grow wildly, attempting to dominate Hong Kong's financial sector.

At that time, it will stop at nothing to tear off pieces of "market fat" from Bank of East Asia, try every means to erode Bank of East Asia's business territory, and finally truly surpass Bank of East Asia to firmly sit on the top spot in Hong Kong's financial sector.

Moreover, given Standard Chartered Bank's influence in Hong Kong and its complex network of interests, the Governor's Office might secretly open doors for it, providing certain policy or other conveniences.

All of this is not unfounded; it is all highly likely to happen.

He Shanheng said in a deep voice with a solemn expression: "Haoran, you've hit the nail on the head. Ever since Hengsheng Bank was acquired by Huifeng Bank, I have become one of the board members of Huifeng Bank. I am very clear about the underhanded and unscrupulous tricks of British companies."

On the surface, they acted very proper, but behind the scenes they did all sorts of shady things to achieve their goals. What I least expected was that Hengsheng Bank was also acquired by them in such a way. These things are still fresh in my mind.

I will personally select some trustworthy, quick-witted, and reliable people to keep a close eye on Standard Chartered Bank's every move, and report to me immediately at the slightest sign of trouble.

Lin Haoran nodded slightly, a confident smile playing on his lips, and said, "I'll also have President Cui arrange for people to keep a close eye on Standard Chartered Bank. As long as we successfully acquire Hengsheng Bank's shares and currency issuance rights, no matter what Standard Chartered Bank does, we can handle it all!"

In the blink of an eye, a day had passed, and it was the morning of July 27th.

Huifeng Bank, headquarters building, in Sir Michael Sandberg's office.

At this moment, Marc Morial, John Paulson, and other core executives of Huifeng Bank were all sitting on the sofa.

The expressions on their faces were not very good.

A few days ago, in order to support Huafeng Bank, the Governor's Office made a high-profile announcement that it would temporarily deposit more than HK$10 billion of the Financial Secretary's reserves into Huafeng Bank, thereby helping the bank avoid a break in its capital chain.

However, despite the governor's promise, the funds never arrived, which undoubtedly worsened Huifeng Bank's already precarious financial situation.

“Mr. Sir Michael Sandberg, our cash reserves are now less than HK$3 billion. If this continues, it won’t be long before the funds are completely depleted. Moreover, Standard Chartered Bank keeps making excuses and won’t give us any definite answer as to whether they will lend us any funds or not.”

"During this period, our funds have been flowing out. Although the rate of outflow has slowed down somewhat, there are still two to three hundred million Hong Kong dollars flowing out every day. If this continues, our Huifeng Bank will be in a huge crisis!" John Paul said with a worried expression and a long sigh.

“The situation at Hengsheng Bank is not optimistic either. Affected by Huifeng Bank, our funds are also flowing out continuously. Therefore, the financial support that Hengsheng Bank can provide to Huifeng Bank is extremely limited and cannot be of much help!” Pu Weishi said with a furrowed brow and deep concern.

Originally, according to the established plan, after successfully obtaining the support of the Governor's Office, and then obtaining a loan from Standard Chartered Bank, plus the normal monthly return of the loan funds, Huifeng Bank only needed to survive for a year and a half.

Once more and more funds are recovered, we will be able to overcome this crisis and completely escape the danger of a broken cash flow.

However, while the ideal is lofty, the reality is incredibly cruel.

Shen Bi paced anxiously back and forth in his office, his brows furrowed and his dark circles under his eyes particularly noticeable, clearly indicating that he hadn't been able to get a good night's sleep in a while.

The attitude of the Governor's Office was really too strange.

Logically, the Governor had already publicly announced that as long as the Financial Secretary cooperated and allowed Huifeng Bank to handle the funding matters, the cash would arrive soon, and Huifeng Bank's coffers would be quickly replenished.

But now, so many days have passed, and the other party still hasn't called Huifeng Bank to make contact, as if they are deliberately delaying. This makes Shen Bi anxious and full of doubts.

"I'll go to the Governor's Mansion again this afternoon. Also, I've commissioned the Wharf Holdings to help us sell some of our shares in other companies in order to raise more funds."

I'll call Lord Derek Barber, the chairman of Standard Chartered Bank, later. They need to give me a clear answer eventually. If that doesn't work, I'll contact other banks, but that might be quite difficult.

"Our Huifeng Bank usually partners with Standard Chartered Bank the most. If Standard Chartered Bank won't lend to us, it's even more hard to say about other banks," Shen Bi sighed helplessly.

Huifeng Bank has been operating in Hong Kong for many years and has excellent relationships with major Hong Kong companies, such as Swire Group, Wheelock & Co., Jardine Matheson, and Worldwide Shipping Group.

At the same time, Huifeng Bank also holds a certain number of shares in these companies, which are mutually held in order to deepen cooperation between the two parties.

For example, Huifeng Bank previously owned a 6% stake in Jardine Matheson.

However, before Jardine Matheson withdrew from Hong Kong, Huifeng Bank had already sold off its shares in order to reduce losses.

Nevertheless, they still hold a significant number of shares in major British-owned companies in Hong Kong. If they were to sell all of these shares, raising several billion Hong Kong dollars would be no problem at all.

These are considered Huifeng Bank's "trump cards".

However, the sale of these shares cannot be done overnight; it requires the right timing and buyers. Otherwise, a hasty sale may not only fail to obtain the desired price but could also trigger market turmoil and negatively impact Huifeng Bank's reputation.

Shen Bi was well aware of this, which is why he had not readily used these shares before.

But now, the situation is pressing, and if no action is taken soon, Huifeng Bank may not be able to hold on for much longer.

“Mr. Sir Michael Sandberg, selling shares may solve the immediate problem, but it’s not a long-term solution. Our Huifeng Bank’s position in Hong Kong cannot be so easily shaken,” John Paul said worriedly.

He understood what selling the shares meant: it would weaken both Huifeng Bank's strength and influence.

At the same time, once the sale is completed, Huifeng Bank will no longer have the special relationship of cross-shareholding with these companies, and will face many uncertainties in business cooperation and resource sharing in the future. It may even trigger a series of chain reactions, further declining Huifeng Bank's status in Hong Kong's financial sector.

Shen Bi stopped and looked at John Bao, saying slowly, "I am well aware of the drawbacks of selling shares, but the situation is critical right now. We don't have many options. We must get through this difficult time first, preserve the foundation of Huifeng Bank, and then find a way to recover and rebuild our relationships with all parties."

Pu Weishi nodded and said, "Mr. Shen Bi is right. The most urgent task now is to solve the funding problem. Otherwise, everything is just empty talk. However, once the news of our share sale gets out, the market reaction will be hard to predict. We need to be prepared to deal with all kinds of emergencies."

Shen Bi took a deep breath and said with a solemn expression, "That's right. Huoduoli Company will try its best to sell shares in secret, but in this way, the selling progress will inevitably be extremely slow, and the funds recovered will be greatly reduced."

However, we will also consider accelerating the pace of the sale when the time is right. I will arrange for the public relations department to develop a comprehensive plan in advance to minimize the impact of the share sale on the market.

If the situation becomes so dire that we are forced to sell off our overseas assets, we must first preserve Huifeng Bank's foundation in Hong Kong before we can pursue long-term development and secure our future!

They didn't want anyone to know about this, so they didn't dare to contact wealthy investors or conglomerates; otherwise, it wouldn't have been so difficult for them to sell their shares.

Therefore, the best approach is to secretly and gradually sell off the shares and slowly recoup the funds.

That's what they said, but everyone present knew very well that even if they sold off all their overseas investments, they wouldn't get much money.

For example, HSBC acquired a 51% stake in US$3.41 million, which is only a little over HK$1 billion. Moreover, finding a buyer would not be easy, because HSBC's profit and loss situation is well known in the US financial and investment circles.

In this situation, if Huifeng Bank wants to sell its shares in Haifeng Bank, it can only do so at a lower price.

As for other assets, such as the Bank of England and the Bank of England Middle East, they are even less valuable; even if they were all sold, they might not be able to raise HK$1 billion.

Compared to Huifeng Bank's current massive funding gap, the proceeds from the sale of these overseas assets are merely a drop in the bucket and cannot fundamentally solve the predicament facing Huifeng Bank.

“I learned something from the UK: the Blair family originally planned to convene a shareholders’ meeting to remove you, Mr. Simbir, because they felt that the current situation of Huifeng Bank was entirely your responsibility.”

Fortunately, Mr. Ivar Morric intervened and prevented the shareholders' meeting from taking place. However, if the situation of our Huifeng Bank does not improve in the next month, Mr. Shen Bi and I will probably become scapegoats! John Bao lowered his voice and revealed a little-known secret.

Both the Blair family and Mr. Ivar Morric are the real financial backers of Huifeng Bank, that is, major shareholders.

As for Sir Michael Sandberg, John Paulson, and William P. Smith, they were just professional managers.

The early shareholders of Huifeng Bank actually included British, American, German, Danish, squid and Indian Parsi people, etc. These forces formed the complex shareholder structure of Huifeng Bank in its early days, like a complex web that tightly entangled Huifeng Bank.

Because of its extensive network of connections and abundant resources, Huifeng Bank has relied on these powerful connections to develop rapidly since its establishment.

However, in the years that followed, apart from the British consortium, other shareholders gradually withdrew, and Huifeng Bank gradually evolved into a bank controlled by the British.

With its deep-rooted foundation and powerful influence, the British consortium firmly controls the development direction and major decisions of Huifeng Bank.

Upon hearing this news, Shen Bi's face turned deathly pale, and fine beads of sweat appeared on his forehead.

Huifeng Bank is facing a major crisis, and he has been doing his best to turn the tide. However, these pampered conglomerates behind the scenes are not only not providing substantial support, but are also trying to dismiss him to shirk responsibility. This makes him feel extremely disheartened and angry.

"Hmph! They think that by dismissing me, Huifeng Bank can turn the tide? They're delusional!" Shen Bi's eyes widened in anger, veins bulged on his forehead, and his voice trembled slightly with emotion.

"The current situation is clearly due to the overwhelming strength of the opposing forces. No matter who is in charge, they would find it difficult to cope with this predicament. How can all the blame be placed on me alone?"

John Paul sighed helplessly: "Mr. Sir Michael Sandberg, there's no use talking about this now. We still need to find a way to solve the current predicament. If Huifeng Bank really collapses, we professional managers will certainly lose our jobs, and those conglomerates will also suffer heavy losses."

Those present naturally understood the current predicament of Huifeng Bank. Mr. Shen Bi could not possibly bear the blame, and it was not solely his fault.

The rise of Bank of East Asia was simply too rapid, faster than anyone could have imagined. By the time they realized what was happening, they were already caught off guard.

But why would the conglomerates behind them bother to investigate these reasons?

(End of this chapter)