In Hong Kong, we build a global business empire

In a luxurious villa on Plantation Road, Victoria Peak, Hong Kong.

This area is a traditional gathering place for Hong Kong's elite, including heads of British conglomerates, diplomats, and so on.

At that moment, John Madden, the manager of Wheelock & Co., was sitting in his study, puffing heavily on his cigar.

He gazed out the window at the bustling Victoria Harbour in the distance, his eyes somewhat dazed amidst the swirling smoke.

Outside the window, one can see the most bustling scene in Hong Kong.

Skyscrapers stand tall, neon lights shimmer, and cargo ships shuttle back and forth on the surface of Victoria Harbour, creating a scene of prosperity.

But he wasn't in the mood at all.

Just now, the housekeeper told him that a British businessman who had been his neighbor for seven or eight years had put his villa up for sale, reportedly at 20% below market price, in order to sell it as soon as possible.

The other party plans to move back to the UK this month.

The reason, of course, is that the other party sees no future in Hong Kong, so they decided to stop the bleeding in time.

John Madden's cigar trembled slightly upon hearing the news.

The British businessman next door was also an old friend of his.

The two had been neighbors for seven or eight years, occasionally bumping into each other in the garden to chat about the weather and the stock market.

The businessman was more than ten years younger than him and ran a trading company in Hong Kong, where his business was thriving.

Although his assets were far less than those of the Wheelock and Company tycoon, he still had assets worth over 100 million.

But now, even he's gone.

There have been far too many such messages lately.

The entire Plantation Road, and even the nearby Peak Road, Barker Road, Stanford Road, Pollock Road, Old Peak Road, etc., are home to many British business tycoons.

But recently, he has heard of at least 20 companies that are planning to move out of Hong Kong.

All of this completely disrupted his mind.

Originally, his father, George Madden, lacked confidence in the future of Hong Kong, which led him to focus the Wheelock Group's operations on more mobile ocean shipping.

However, after John Madden took over his father's business, he believed that his father's judgment was too pessimistic.

Therefore, after becoming the new head of Wheelock & Co., he began to vigorously reform the group, gradually changing its business strategy and strengthening its investment in Hong Kong.

He strengthened the group's business in Hong Kong real estate and retail department stores by launching a series of acquisitions.

Of course, John Madden never neglected Wheelock's core business of shipping, and even strengthened its development in the 1960s.

By the 70s, Wheelock had become one of the four major British-owned trading companies in Hong Kong, with 49 directly affiliated subsidiaries, including listed companies such as Hong Kong Estate Trust, Commonwealth Properties, Harlequin Development, Lane Crawford, Wheelock Shipping, United Enterprises, and Po Fook Development.

These subsidiaries, in turn, have approximately 180 affiliates and 20 private companies, forming a large, diversified conglomerate.

That was the height of John Madden's fame.

In Hong Kong newspapers, his name was always associated with terms like "British tycoon" and "business genius".

Even the Governor of Hong Kong would address him politely as "Mr. Madden".

However, since the outbreak of the second oil crisis, the world economy has generally declined, which has severely impacted the development of the international shipping industry.

Oil transportation was the first to be affected, gradually impacting other types of vessels.

As a result, Wheelock's business and profits were greatly affected.

In addition, John Madden's observation of the situation on the mainland during this period and the political turmoil affected his confidence in Hong Kong's future, causing him to feel the same anxiety his father had during the time when he was in charge of Wheelock.

Therefore, in 1976, John Reed decided to sell his family's shares in Wheelock, and the target of the sale was Jardine Matheson, the leading of the four major trading companies at the time.

At the time, both Jardine Matheson and Hongkong Land were very interested in the shares held by John Reed.

The reason is simple: once Jardine Matheson acquires Wheelock & Co., Jardine Matheson will surpass HSBC and become the most powerful conglomerate in Hong Kong.

However, this outcome was clearly not something that someone wanted to see, and that person was Huifeng Bank.

After a series of business battles, the final result was that Huifeng Bank successfully thwarted Jardine Matheson's acquisition plan.

John Madden had no choice but to remain in office, struggling to maintain this vast business empire.

Subsequently, Hong Kong's real estate industry entered a period of rapid development, which allowed Wheelock & Co. to quickly recover and its profits returned to their previous high levels.

However, John Madden had already developed a lack of confidence in Hong Kong's future, so while others were investing heavily in the real estate industry, Wheelock did the exact opposite.

They demolished and rebuilt the properties owned by the group, sold them at high prices during the real estate boom, and then used the proceeds to actively develop the shipping industry, ordering a large number of bulk carriers to expand the fleet.

Logically, John Madden should be happy that Hong Kong's real estate industry is in crisis.

After all, during the peak of Hong Kong's real estate market, he continuously sold off his properties, such as the International Building and the Federal Building, reducing the group's real estate business to a minimum and investing all the cash he raised into the shipping industry.

In his view, this is the safest approach.

Land may be expropriated, buildings may be demolished, but ships will forever float on the sea, forever under his control.

As long as the shipping industry recovers, his fleet will bring him a steady stream of wealth.

But now, the shipping industry has not only failed to recover, it has fallen even further.

Following the outbreak of the oil crisis, global trade shrank, shipping demand plummeted, and shipping prices fell sharply.

Those ships that were once considered "unsinkable" have become bottomless pits that devour cash flow.

The larger Wheelock's fleet, the greater its losses.

The money he made from selling real estate went straight into this bottomless pit, without even a ripple.

In the past two years, Wheelock's financial reports have become increasingly unfavorable, because the shipping industry has dragged down the entire Wheelock & Co.

If it weren't for the profits from Hong Kong's real estate industry, Tak Fung might have gone under long ago.

But now, the real estate industry has also collapsed.

John Madden’s two pillars of pride, shipping and real estate, collapsed overnight.

He could easily imagine that the next few years would be even more difficult for Wheelock & Co.

John Madden gave a wry smile and stubbed out his cigar in the ashtray.

"Let's go, let's all go," he muttered to himself. "Hong Kong is no longer the Hong Kong it used to be."

He stood up, walked to the window, and looked at Victoria Harbour in the distance.

This is his habit at home.

Overlooking the entire city center of Hong Kong gave him a feeling of being in control of everything.

But now, that feeling has completely disappeared.

What he saw was not prosperity, but desolation; not hope, but despair.

He also watched Lin Haoran's live broadcast on TVB Jade last night.

John Madden had great admiration for this young man.

He initially sold the Federal Building and the International Building as a package to Lin Haoran for HK$10 billion.

As a result, in less than a year, the other party sold the International Building separately to Caring Group for HK$10.68 billion.

In other words, Lin Haoran made a fortune in less than a year by acquiring a Federal Building from Wheelock Properties. In addition, the annual rent for these two buildings was nearly HK$70 million.

In contrast, Wheelock & Co. poured all HK$10 billion raised from the sale of two buildings into the shipping industry, suffering huge losses.

This is the gap.

It's not a matter of vision, it's a matter of perspective.

John Madden was ultimately just a conservative, while Lin Haoran was the true pioneer.

Therefore, John Madden genuinely admired Lin Haoran.

Even if the other person is just a young man under thirty, while he himself is already over sixty.

In the business world, seniority is important, but ability is the only true measure of success.

Lin Haoran proved himself with solid achievements, while John Madden could only watch helplessly as the business empire he had built crumbled.

However, John Madden scoffed at Lin Haoran's speech on television last night.

He could tell at a glance that Lin Haoran's remarks on television were definitely pushed by the new governor, Youde.

Therefore, John Madden did not believe Lin Haoran's nonsense at all.

Those words were less addressed to ordinary citizens and more to the British. Lin Haoran was conveying to the British: I have confidence in Hong Kong, I will not leave, and I will continue to invest.

This was both an attempt to appease the British and to gain more political capital for himself.

As for those 20 billion investment commitments?

Just listen to it.

Merchants are driven by profit; it's in their nature.

No matter how optimistic Lin Haoran is about Hong Kong, he won't do a losing business.

John Madden withdrew his gaze from Victoria Harbour, returned to his chair, and sat down.

On his desk was a document that was giving him a headache: it was a document from early last year in which Wheelock Shipping, a subsidiary of Wheelock & Co., ordered two giant ships from Denmark. The total value of the two ships was more than 400 million US dollars.

At the time, Hong Kong's real estate industry was booming, and although the shipping industry was showing signs of decline, John Madden stubbornly believed that this was only a temporary fluctuation.

He firmly believes that once the oil crisis is over and the global economy recovers, the shipping industry will regain its former glory.

So despite opposition from many people within the company, he insisted on ordering the two giant ships.

After all, with its Hong Kong real estate business as a foundation, Wheelock & Co. had a steady stream of funds to support its shipping dreams.

But now, the real estate industry has collapsed, and the shipping industry has collapsed too.

This purchase contract, however, became a joke.

Without this contract, perhaps the Wharf Holdings firm wouldn't have faced such difficulties.

John Madden picked up the contract, flipped through it, sighed, and put it back on the table.

At that moment, a young man walked in; he was his youngest son, William Madden, and also his most beloved child.

"Father, you wanted to see me?" the young man asked.

John Madden nodded, gesturing for him to sit down.

"William, are you really sure you want to go to Australia to be your farmer instead of learning business management from me?"

William nodded, a hint of apology on his face: "Father, I know you hope I can take over Wheelock, but I really have no interest in doing business."

I love Australian ranches, I love the sunshine and grasslands, I love interacting with cattle and sheep, I…

John Madden waved his hand, interrupting him: "No need to say anything more, I understand. You have your dreams, and I won't force you. This is the last time I'll ask you."

William was silent for a moment, then said, "Father, I'm sorry."

John Madden shook his head: "No need to apologize. You have your own path to follow, which is a good thing. When I was young, I also dreamed of being a captain and sailing the seas."

But your grandfather insisted that I come back to take over the family business, and I've been doing it for decades now.

He gave a wry smile: "Looking back now, if I had stuck to my dream back then, I might be happier now."

William looked at his father, a pang of sorrow welling up in his heart.

He knew that his father had devoted his entire life to Wheelock and Company, and as his son, he had witnessed his father's glory.

But now, the business empire he poured his heart and soul into is declining under his leadership.

"Father, what do you plan to do about those two ships?" William asked.

John Madden sighed: "What else can we do? We can only bite the bullet and accept it, and then hope that the shipping industry will recover soon."

The Zhang family has been very unhappy with me lately, even wanting Wheelock & Co. to split up. As the major shareholder of Wheelock & Co., they certainly have the power to do so. Plus, other shareholders are also pressuring me, and I simply can't hold on any longer.”

The major shareholder of Wheelock & Co. was not John Madden, but the Zhang Yuliang family.

The Zhang Yuliang family holds approximately 40% of Wheelock's shares, while the Madden family holds only 13.5%, with the remaining shares scattered among numerous small shareholders.

John Madden would never have been in this position for so long if Wheelock's listed shares hadn't been composed of A and B shares.

Ten years ago, Wheelock announced that it would convert its issued shares into AB shares, in which each B share had a par value of 1/10 of an A share but had the same voting rights as an A share.

The purpose of this reform was, of course, to consolidate the John Madden family's control over Wheelock & Co.

This reform indeed brought John Madden extremely rich rewards.

Thanks to the dual-class share system, the Madden family has maintained firm control over the massive Wheelock & Co. business empire to this day with less than 15 percent of the shares.

But now, with Wheelock's performance plummeting, minority shareholders are increasingly dissatisfied with the Madden family.

If the Zhang Yuliang family seizes the opportunity to launch an attack and demands the abolition of the dual-share system and the implementation of one share, one vote, and succeeds, then the Madden family will immediately lose control of Wheelock.

This is exactly what John Madden is most worried about.

The Zhang Yuliang family holds 40% of Wheelock's shares, making them the largest shareholder.

The Madden family only owns 13.5% of the shares, and they can barely maintain control thanks to the dual-class share structure.

If the dual-class share system is abolished, he will have no room to resist.

So John Madden was annoyed; he felt that Wheelock was now a mess.

Adding to his despair was his youngest son's complete lack of interest in taking over the business and his insistence on becoming a farmer in Australia.

His eldest son had already stated that he had no interest in the shipping or real estate industries, but only enjoyed studying history and art.

The second son was interested in business, but his abilities were mediocre. With his support over the years, the company had barely managed to stay afloat and was far from being able to support the massive Wheelock and Company business empire.

None of his three sons were able to take over the responsibilities he had.

John Madden sometimes wondered if he was a complete failure.
In his business dealings, he managed Wheelock and Company to decline steadily.

In terms of family, he couldn't even raise a qualified successor.

“Father, don’t be too sad,” William said softly. “The Wheelock problem is not your fault. It’s just that times have changed. The shipping industry is failing, and so is the real estate industry.”

It would be the same no matter who sat in this position.

“Alright, William, you can go out now. Let me have some peace and quiet. I’ll take you to Kai Tak Airport tomorrow morning to catch your flight to Sydney.” John Madden waved to his youngest son.

William opened his mouth, as if he wanted to say something, but seeing his father's tired face, he finally closed his mouth and quietly withdrew.

Perhaps it was because John Madden had been in a high position for a long time and had an intimidating presence that he was afraid of his father from a young age, which may be one of the reasons why he wanted to stay away from his father when he grew up.

The study fell silent again.

John Madden sat alone in a large leather chair.

Outside the window, the lights of Victoria Harbour lit up one after another, illuminating the entire harbor in a dazzling display.

That was the scenery he had seen for most of his life, a sight that once filled him with immense pride, but now it only stung his eyes.

He thought of his father, George Madden.

That stubborn old man foresaw the limitations of Hong Kong in the 1950s and insisted on shifting Tak Fung's focus to international shipping.

At that time, he was young and impetuous, and felt that his father was too pessimistic, believing that Hong Kong had unlimited potential.

But now he has to admit that his father was right, though not entirely right, only half right.

The future of Hong Kong does not look optimistic now, but my father did not foresee the fate of the shipping industry.

He thought that betting everything on shipping would guarantee his safety, but the shipping industry suffered an even greater blow than the real estate industry.

John Madden picked up the coffee on the table, which had long since gone cold, and drank it down in one gulp, trying to calm himself down.

In Hong Kong today, Chinese-owned conglomerates have far surpassed British-owned conglomerates, especially with the rise of Lin Haoran, which has widened the gap between the two even further.

Of the four major foreign trading companies that were once based in Hong Kong, Jardine Matheson was forced to withdraw from Hong Kong and move its headquarters to London, England; Hutchison Whampoa has now been acquired by Lin Haoran; Wheelock & Co., which he led, is in dire straits; and only Swire Group remains relatively stable.

Swire Group has always been conservative. Although it has made considerable investments in Hong Kong, it never takes risks easily, nor is it as flamboyant as Jardine Matheson.

The Schjokers were much smarter than the Keswicks; they knew when to advance and when to retreat.

John Madden sometimes wondered if Wheelock would have ended up in this state if he had been as conservative as Swire and hadn't acquired so many properties or ordered so many ships.

But he also felt that if that were the case, Wheelock would not have had its former glory, let alone become one of the so-called four major trading companies.

At least, Wheelock & Co. had its glory days under his leadership.

At least, he is still a top tycoon in Hong Kong's business world and the head of one of the four major trading companies, even if this is his last glory.

No?
Just then, the mobile phone on the table rang.

John Madden snapped out of his daze, picked up his mobile phone, and pressed the answer button.

Lin Haoran's voice came through the mobile phone: "Mr. Madden, this is Lin Haoran. I was wondering if you have a moment to speak with me privately!" (End of Chapter)