In Hong Kong, we build a global business empire

Forbes magazine was founded in 1917 and has a history of 64 years.

Over the years, Forbes has gradually built up a profound industry influence by continuously reporting on business developments, analyzing economic trends, and uncovering corporate value.

Its coverage spans a wide range of sectors, including finance, industry, technology, and consumer goods, providing valuable information for business leaders, investors, and policymakers.

For example, this year, as the US economy was in a critical period of recovery from stagflation, the demand for business management surged. Forbes magazine keenly captured this trend and promoted the dissemination of business management ideas through activities such as selecting "20 Most Influential Business Books of the 20th Century".

These books cover fields such as management, biography, and investment, and extract success principles through case studies, making them essential reading for many corporate executives, entrepreneurs, and MBA students.

This is precisely why Forbes Group has consolidated its authoritative position in the field of business content and driven the prosperity of the global business publishing market.

Today, Forbes magazine holds a very high position in the American business world and has long been positioned as a professional magazine for business people.

However, at this time, Forbes was not the most influential magazine in the United States. There were two more influential magazines in front of it: Fortune and BusinessWeek.

Originally, Forbes intended to use the upcoming "Forbes 400" list of the richest Americans, and even the future global rich list, to completely surpass the previous two magazines and become the benchmark in the global financial media field.

In another world, it truly succeeded. As the influence of the rich list grew, Forbes' circulation and readership increased significantly, and its advertising revenue remained in the lead for a long time, surpassing Fortune and BusinessWeek to become the world's No.1 business magazine.

However, in this world, because of Lin Haoran's appearance, Oriental Media Group directly snatched the first place on the rich list. Forbes' strategy of creating the first truly modern "rich list" that it originally regarded as its trump card was suddenly attacked.

Therefore, they now have only one option: to smear the Hong Kong Rich List, a publication of the Oriental Media Group.

If the public believes the list is fake, all the efforts made by MediaCorp will be in vain, and may even backfire on its own credibility.

Forbes, on the other hand, will regain the commanding heights of wealth discourse and may even gain unprecedented attention and moral halo through this "anti-counterfeiting" storm, building momentum for the release of its "Fortune 400" list and surpassing Fortune and BusinessWeek in one fell swoop.

The Forbes executives present were well aware of this.

They are well aware that in the world of business media, sometimes destroying a challenger is a faster way to establish authority than simply building one's own.

Especially when the other party seems to be coming on strong, but the authenticity of the wealth list is highly questionable.

Ultimately, Malcolm Forbes finalized the plan at the strategy meeting: "Instead of getting bogged down in the established fact of 'who released first,' we will launch a decisive battle on the fundamental question of 'whose list is more authentic and credible.'"

They want to nail the "Hong Kong Rich List," especially Lin Haoran's personal wealth figures, to the pillar of shame for being "exaggerated" or even "fabricated."

Forbes acted very quickly; they soon determined a specific tactic, which was carefully designed as a three-step process.

The first step is to pinpoint the core issue and question its origins.

Forbes did not choose to launch a full-scale attack on the entire Hong Kong Rich List 200, as that would not only have a scattered target but also easily arouse collective resentment from the local Hong Kong business community.

They focused their firepower on the most conspicuous target, which they also considered the most vulnerable: Lin Haoran himself and his staggering and highly questionable $113 billion fortune.

Forbes’ elite team of investigative journalists will be mobilized, utilizing all public channels, databases, industry reports, and their connections on Wall Street and in Asian financial circles to gather all verifiable information about Lin Haoran’s assets in the United States and Hong Kong.

Coincidentally, due to the poor performance of Hong Kong's real estate market, the Hong Kong stock market has been declining for the past two or three months, and the property market has become increasingly sluggish.

This environment is a godsend for Forbes.

They discovered that the market capitalization of the listed companies controlled by Lin Haoran, such as Hong Kong Electric Holdings, Hong Kong Telephone, China Bus, Hong Kong and China Gas, Huafeng Bank, and Hutchison Whampoa, has fallen by nearly 7% in the last two or three months compared to their peak.

This is actually not considered a high drop; the Hong Kong Hang Seng Index has fallen by 17% in just a few months.

The real estate industry and its supporting industries are the most affected.

Such as upstream industries like building materials, construction companies, engineering machinery and equipment, land development planning and design institutions, and financial institutions that finance projects;

Real estate development and construction contracting companies of midstream enterprises;

Downstream industries include home furnishing consumption, property services, intermediary transactions, and supporting services such as retail, education institutions, medical institutions, and commercial services.

It can be said that the sudden stagnation of the real estate industry has impacted many related industrial chains in Hong Kong, leading to a quiet rise in the unemployment rate and a significant blow to market confidence.

It's perfectly normal for the stock market to fall.

This is under the condition that housing prices are relatively stable. Once a real collapse occurs, it is obvious that Hong Kong's stock price will be greatly affected!

The value of listed companies is easy to assess, but those companies that Lin Haoran privatized, such as Land Group, Wanqing Group, and Hengsheng Group, are not.

Furthermore, after these companies were wholly acquired, they stopped publishing financial reports, making the assets they controlled an even greater mystery.

However, these companies are all related to the real estate and finance industries, which provided Forbes' investigation team with an excellent entry point.

This is naturally an underestimation.

Since it's a privately held company, not a publicly listed one, its value is entirely up to them.

This idea quickly took root within Forbes, especially among the radicals led by investigation director James Krock.

Since it is impossible to obtain the true financial data of these privatized companies or conduct on-site audits, under the framework of "reasonable questioning," making an "extremely conservative" or even "deliberately understated" estimate of their value becomes the most effective and hardest weapon to attack opponents.

“We don’t need to be precise, we just need ‘reasonable suspicion’,” James said in an internal discussion.

"For real estate giants like Hongkong Land and Evergreen, given the current stagnation or even decline in Hong Kong's property market, we can cite the most pessimistic analyst reports, adopt the highest capitalization rate, the lowest rental growth expectations, and even consider the risk of asset impairment."

We can estimate that if these companies' properties were to be 'forced to liquidate' based on the current depressed market sentiment, their value might only be 60% or even 50% of their valuation at the time of privatization.

He continued his deduction: "As for the Hengsheng Group, which almost monopolizes the financial industry in Hong Kong, although its market share seems very high, Hong Kong is ultimately just a small market, so how high can its real value be?"

Just like the American banking industry, financial giants like Citigroup, which control hundreds of billions of dollars, have a stock market capitalization of just over four billion dollars.

This is true for all publicly listed financial companies in the United States; their stock valuations are severely undervalued.

Compared to giants like Citibank, Hengsheng Group is insignificant, and given that the Hong Kong real estate market will inevitably impact it, I believe Hengsheng Group's market capitalization cannot be very high!

Soon, an internal report titled "The Mystery of Lin Haoran's Wealth: The Huge Gap Between the Known and the Unknown" was completed.

The report's core conclusion is that, based on all reliable sources, Lin Haoran's identifiable assets in the United States, such as Citigroup, early investment profits, and Southern Company, are valued at approximately $8 million to $10 billion.

His assets in Hong Kong, such as Hongkong Land, HK Electric, Wan Tsing Group, and MediaCorp, are estimated by the team to have a fair value of less than US$50 billion, based on local market valuations and without considering liabilities.

Combined, the optimistic upper limit is about $60 billion.

This is indeed a very alarming number.

However, this still leaves an inexplicable gap of over $53 billion compared to Lin Haoran's claimed $113 billion.

This report has been meticulously packaged as an "in-depth investigation" and "data analysis," and is poised for a major release in Forbes magazine and its partner media outlets.

The article will not directly say "Lin Haoran committed fraud", but will repeatedly emphasize "lack of transparency", "questionable valuation methods" and "huge gap that needs to be explained", and list a series of sharp but seemingly reasonable questions.

Does his priceless Hong Kong property have an independent, recent valuation report?
What is the true profitability and cash flow of his media group?

What assets are behind those complex offshore holdings?
Are there any undisclosed large amounts of debt?
Step 2: Create public opinion and guide doubts.

Before the core article is published, Forbes will leverage its vast media relations network and opinion leader resources to strategically "leak" and spread "professional skepticism" about Lin Haoran's wealth data in major global financial media and social circles, primarily high-end clubs, industry conferences, and professional journals.

They would convey this message through columns, analyst comments, and even private conversations: "The numbers on that Hong Kong rich list sound amazing, unbelievable."

"Analysis based on publicly available information reveals significant contradictions."

“Investors and partners need to examine the real assets behind them more carefully.”

The goal was not to immediately convict, but to sow seeds of strong suspicion among the elite and the public who were concerned about the matter, creating a public opinion atmosphere akin to "The Emperor's New Clothes."

Step 3: Publicly challenge them to force a response.

When the criticism reaches a certain level, Malcolm Forbes will send an open letter to Lin Haoran in his personal capacity, with copies sent to major media outlets worldwide.

In the letter, he will formally request Lin Haoran to make a public clarification on the "unexplained gaps" in the composition of his wealth, in the lofty name of "defending the authenticity of wealth information" and "promoting business transparency".

In particular, it requires them to provide key information such as independent valuation certificates for core Hong Kong assets and audited financial statement summaries.

He will juxtapose Forbes' "verified data" of $8-10 billion in US assets plus no more than $50 billion in Hong Kong assets with Lin Haoran's "published data" of $113 billion to create a stark contrast, and "sincerely" invite Lin Haoran to provide evidence in order to "eliminate public doubts".

This is an elaborate trap.

If Lin Haoran refuses to respond or is unable to provide convincing evidence, it would be tantamount to admitting to Forbes' doubts, and his wealth myth and the credibility of the list would collapse instantly.

If he responds, he will have to enter the "data verification" battlefield set by Forbes and explain those complex and ambiguous assets in front of everyone. This process itself will be full of loopholes and greatly undermine its credibility.

To the executives at Forbes magazine, the plan was perfect!

They believed that once implemented, Lin Haoran would be caught in a dilemma, and his meticulously crafted wealth myth and "Eastern Rich List" system would face annihilation. Forbes was full of confidence, believing they had finally found the fatal weapon to completely crush this Eastern challenger.

However, just as Forbes was preparing for this "media explosion" and was about to launch its in-depth report, "The Mystery of Lin Haoran's Wealth: The Huge Gap Between the Known and the Unknown," simultaneously worldwide, the US stock market underwent a dramatic change!

Previously, when Lin Haoran was in the United States, he made some remarks at MIT regarding the contradiction between high interest rates under Reaganomics and the stock market reaching new highs, and made some predictions about the US stock market.

When his remarks were circulated, he was even seen as a "clown" by Americans.

Because of the immense public outcry, Lin Haoran simply left the United States ahead of schedule, and his stay there was not very long.

The outpouring of criticism and confidence in the US stock market from numerous financial and business leaders led to a significant surge in US stocks over a period of time.

Just when these financial giants thought the US stock market was about to enter a bull market, a long-brewing storm finally tore away the veil of false prosperity and swept across Wall Street with overwhelming force.

Just before Forbes executives raised a toast to the impending "public opinion nuclear explosion," a series of structural risks, long suppressed by high interest rates, fiscal deficits, valuation bubbles, and the shadow of stagflation, erupted one after another like toppled dominoes.

First, there was the continued surge in long-term interest rates, far exceeding market expectations.

The Federal Reserve's aggressive monetary policy in its fight against stubborn inflation is beginning to have a cumulative effect that is violently impacting the real economy.

Corporate financing costs have risen sharply, consumer willingness to borrow has shrunk, and highly leveraged companies, especially those that have expanded aggressively with leverage during periods of low interest rates, are facing increased debt repayment pressure.

Sporadic warnings of corporate debt defaults have begun to appear in the market, and panic is quietly spreading in the fixed income market.

Following this, several star technology and consumer companies that were overhyped by the market but had fragile profit models and worrying cash flow saw their stock prices plummet after releasing quarterly earnings reports that fell short of expectations.

This is not just an individual problem of a few companies; it is like a needle piercing the dazzling bubble of "unlimited growth expectations" that surrounds growth stocks.

Investors were jolted awake and began to re-examine the stocks they held that had alarmingly high price-to-earnings ratios but failed to deliver on their profit promises.

Panic is contagious.

Starting with overvalued sectors, the sell-off quickly spread to the entire market.

The Dow Jones Industrial Average, the S&P 500, the Nasdaq Composite Index...

The charts of all major stock indices have suddenly changed from a graceful, gently rising curve to a heart-stopping, steep decline.

Plunge!

This is not an adjustment, and it's not a callback!
It was a real, massive crash accompanied by huge trading volumes and panic selling!

In just one week, the Dow Jones Industrial Average plunged more than 16%, the S&P 500 fell by a similar amount, and the Nasdaq Composite Index, dominated by technology and energy stocks, suffered an even more devastating blow, with its decline once approaching 19%!

Moreover, the decline seems to be continuing!
This is not just a loss of numbers, but a collapse of confidence.

In the trading floor of Wall Street, the bright red screens reflected the pale faces of the traders, and screams, curses, and ringing telephones intertwined to create an apocalyptic cacophony.

In reality, the US stock market did fall in the original timeline, but the drop wasn't as dramatic as some might think, falling so much in just one week.

There are naturally reasons why things fall so much in this world.

Recently, many stock market gurus, financial tycoons, and business leaders have expressed their support for the US stock market, which has led to a significant increase in the US stock market compared to other times and places.

As the saying goes, the higher you stand, the harder you fall!
Now, falling from an even higher peak of false prosperity, the impact is naturally more severe.

The reversal of market sentiment, the concentrated profit-taking, and the chain reaction of panic selling triggered by the financial reports of overvalued companies all contributed to this rapid plunge that far exceeded the historical levels for the same period.

"Mr. Lin Haoran is right?"

In a luxurious conference room at the Citibank headquarters in New York, someone shouted these words amidst the chaos.

These words struck the conference room like a bolt of lightning, plunging it into a deathly silence.

Today, Citigroup held another executive board meeting at its headquarters.

They didn't want to hold meetings so frequently, but the decline in US stocks made it impossible for them to calm down.

After all, Citibank had made ample preparations for the potential bull market in US stocks, investing a considerable amount of capital in an attempt to profit handsomely from this surge.

However, it seems that, given their current investment, even if they withdraw now, they will still lose hundreds of millions of dollars, let alone make a profit.

This is absolutely a serious investment mistake within Citigroup. Once the financial report is released, it will inevitably lead to a further drop in the stock price and even collective accountability from shareholders!

In the conference room, Citibank's core executives and board members wore solemn expressions, and the air was thick with anxiety and unease.

They originally thought that with their strong capital and confidence in the US economy, they could get a share of the profits in this "bull market" and even regain their former glory.

Who would have thought that before the bull market even showed a glimmer of hope, it was met with a devastating crash.

Previously, Lin Haoran had reminded Citigroup's senior management at a meeting of the executive board, but at the time, apart from John Reed, no director believed that Lin Haoran's remarks would hold true, not even the current chairman, Walter Riston!
Now, they regret it, but it's clearly too late.

"Have we estimated the losses from our proprietary trading?" Chairman Walter Riston asked in a low voice, his exhaustion barely concealed.

The chief investment officer in charge of the trades looked dejected and reported in a low voice: "Preliminary estimates suggest that our direct losses on stocks and stock-related derivatives have exceeded $4 million. If the market continues to fall, the losses could expand to $6-7 million."

This doesn't even include the potential surge in customer redemptions and asset impairment that this could trigger..."

A suppressed gasp filled the conference room.

A loss of hundreds of millions of dollars would be a heavy blow to any bank, but for Citigroup, which is at a critical stage of transformation and trying to revitalize itself, it is an even greater blow.

Although Citibank is a large and powerful bank with two to three hundred billion dollars in wealth, it does not mean that a loss of several hundred million dollars is a negligible amount.

Especially given the current pressure on banking profits and fragile market confidence, a loss of several hundred million dollars is enough to significantly reduce annual profits.

For example, Citibank's profit last year was only $5.8 million.

This wave of investment could cause Citigroup to lose its entire year's profits from last year, or even more!

At that moment, Walter Riston couldn't help but recall Lin Haoran's words at the board meeting earlier.

At that time, he thought Lin Haoran's words were simply alarmist and even somewhat ridiculous.

Although Walter Riston had always liked Lin Haoran, in his view, how could a young man from the East dare to question the resilience of the American economy and the wisdom of Wall Street in a century-old financial institution like Citibank?

At that time, Riston's mind was more focused on the young director's "lack of maturity" and his "need to learn American rules," as well as a subtle, almost imperceptible, sense of rejection from the veteran elite towards the newcomer.

But now, every word of this “alarmist” statement is like a poisoned dagger, repeatedly stabbing him and the entire Citibank board of directors in the face.

The searing pain, mixed with the enormous financial loss and the undeniable error of judgment, left him barely able to breathe.

That's a real slap in the face, a truly humiliating one!
However, it's obviously too late to regret it now.

The downturn came too suddenly.

It happened so suddenly that they had no time to prepare.

Sitting at the back of the oval conference table, Li Guowei was filled with admiration for his boss.

As Lin Haoran's representative at Citibank, Li Guowei fully integrated into his work after Lin Haoran returned to Hong Kong.

First, on behalf of the boss, cultivate good relationships with other executive directors.

Secondly, do your job well at Citibank.

The public opinion surrounding Lin Haoran in the United States has also led him to keep a low profile during this period.

However, at this moment, Li Guowei felt a sense of relief at being an outsider, as well as a hint of indescribable pride.

He clearly remembered that during his boss Lin Haoran's vacation in Hawaii, they had a private phone call.

On the phone, Lin Haoran didn't say much, but calmly gave a few instructions: "Mr. Li, within Citigroup, especially in the investment department, if there are any aggressive plans to significantly increase holdings of US stocks or related derivatives in the near future, as my representative, you do not need to participate in the vote, but you must clearly express your reservations and keep a written record."

At the time, Li Guowei, trusting Lin Haoran's consistent judgment and demonstrating professional competence, strictly followed the instructions.

At the subsequent investment committee meeting, while other directors and executives were excited about the "bull market opportunity," he followed instructions, calmly expressed his "concerns about short-term market overheating and interest rate risks," and abstained from voting. All his remarks and votes were recorded in detail.

Now, with the market crashing and Citigroup suffering heavy losses, Li Guowei's initial "reservation of opinion" and "abstention vote," along with his boss Lin Haoran's already proven accurate prediction, have become the most glaring yet safest "get-out-of-jail-free card" in the meeting room at this moment.

While the other directors and executives looked ashen and were on pins and needles, Li Guowei, though also appearing solemn, was unusually calm inside.

He could even feel several faint, complex gazes fixed on him—gazes filled with inquiry, regret, and perhaps even a barely perceptible hint of envy. (End of Chapter)