Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 208 Tacit Understanding (Seeking monthly votes, recommendations, and subscriptions!)
Two days later, at the coffee shop of the Mandarin Oriental Hotel.

Chen Bingwen and Wei Li sat facing each other. Wei Li looked more tired than the last time they met, it seemed that the HSBC share transfer had put considerable pressure on him.

"Mr. Chen, congratulations on your successful acquisition of a controlling stake in Qingzhou Yingni." Wei Li spoke first, his voice relatively calm.

“Thank you, Chairman Wei Li. Qingzhou Yingni is just the first step; the challenges are yet to come,” Chen Bingwen responded modestly, then changed the subject, “HSBC has already officially transferred its 10.65% stake in Hutchison Whampoa to Cheung Kong Holdings.”

Mr. Li Jiacheng should soon be our 'colleague', right?

Wei Li paused almost imperceptibly in the hand holding the coffee cup, and his face darkened.

He put down his cup, his voice filled with extreme dissatisfaction: "Yes. I didn't receive any formal notification until HSBC issued its announcement."

Perhaps in HSBC's eyes, there's no need to consider the Hutchison Whampoa board, let alone me, the chairman of the board.

History has a striking way of repeating itself.

Just like in its previous life, HSBC did not formally notify the Hutchison Whampoa board of directors before transferring its shares, nor did it seek the opinion of the board chairman, John W. Wellsley.

Within HSBC’s vast and arrogant system, the Hutchison Whampoa board and even Wyman himself may never have been on the list of those who needed to be “solemnly informed.”

This disregard was undoubtedly an insult to Wayne Lai, who had single-handedly pulled Hutchison Whampoa out of its financial quagmire and believed he had at least worked hard, if not made any significant contributions.

Wei Li did feel frustrated.

At that time, Hutchison Whampoa was facing a serious financial crisis due to overexpansion and mismanagement during the reign of King Tak-chon, and was even petitioned for liquidation by creditors.

When he took over Hutchison Whampoa, it was a complete mess.

It was his sweeping reforms—reducing debt, cutting recurring expenses, and eliminating loss-making departments and subsidiaries—that enabled the company to turn a profit and return to profitability.

Although it failed to cause Hutchison Whampoa's profits to skyrocket, it at least stopped the bleeding and stabilized the situation.

There is hard work without credit.

As a result, in HSBC's eyes, Wylie was still just an inadequate manager because he failed to bring the huge appreciation of Hutchison Whampoa's assets to HSBC's expectations.

"HSBC's approach was indeed inappropriate."

The board's right to know and the respect it deserves have been ignored.

This sets a very bad precedent.

Chen Bingwen nodded, agreeing with Wei Li's view.

As a major shareholder with a 33.65% stake, HSBC completely disregarded the Hutchison Whampoa board of directors.

As one of the parties involved, I do feel quite angry.

Wei Li took a deep breath and looked at Chen Bingwen: "Mr. Chen, you asked me to meet you not just to discuss HSBC's way of doing things, right?"

“Of course,” Chen Bingwen said in a low voice. “Chairman Wei Li, we are all shareholders of Hutchison Whampoa and we all hope that the company can develop steadily and create value.”

However, stable development hinges on the board of directors and management making independent decisions based on professional judgment, rather than being swayed by the unilateral will of a major shareholder.

Chen Bingwen's words sharpened Wei Li's gaze.

He understood the unspoken meaning behind Chen Bingwen's words.

"What does Mr. Chen mean?"

“What I mean is,” Chen Bingwen stated clearly, “as a major shareholder of Hutchison Whampoa, Sugar Heart Capital supports the professionalism and stability of the management team led by you.”

We believe that Hutchison Whampoa's future should be decided collectively by the board of directors, rather than by any one individual.

Especially when it involves key issues such as company control, major asset disposal, or the issuance of new shares, a rigorous and transparent procedure must be followed, fully considering the interests of all shareholders.

These words struck a chord with Wei Li.

His biggest worry right now is that Li Ka-shing, with the support of HSBC, will take over the board of directors as soon as he enters and sideline his existing management team.

“I appreciate Mr. Chen’s stance.” Wei Li’s expression softened considerably, and he spoke more directly.

"My biggest concern right now is the future development direction of Hutchison Whampoa after Cheung Kong Holdings takes a stake in the company."

Li Ka-shing is an expert in real estate, but Hutchison Whampoa is a diversified conglomerate with a wide range of businesses, of which real estate is only one part.

My concern is that an overly aggressive real estate-centric transformation could shake the foundations of other businesses.

Chen Bingwen nodded in agreement, saying, "Chairman Wei Li's concerns are very reasonable."

A healthy group needs balanced development, rather than betting all its resources on a single industry.

As a major shareholder of Hutchison Whampoa, Sugar Capital invests in the future of Hutchison Whampoa as a whole, not just its real estate business.

What we value is the professionalism and stability that Chairman Wei Li and your team bring.

He paused, observing Wei Li's reaction, and then extended an olive branch more explicitly: "Therefore, in future board meetings, I believe we should maintain close communication regarding major strategic decisions of the company, such as major asset disposals, investment directions for new businesses, and even the composition of the board."

Sugar Capital will support a professional and independent board of directors and management team to ensure that the company's decisions are based on Hutchison Whampoa's long-term interests, rather than short-term arbitrage or the special purposes of individual shareholders.

Wei Li fully understood Chen Bingwen's intentions.

This is a clear proposal to form an alliance to jointly deal with Li Jiacheng, who is about to join the board of directors.

For him, this was undoubtedly a timely help.

With the support of another director and shareholder, his influence on the board will be greatly enhanced, enough to counterbalance the potential impact of Li Jiacheng.

“Mr. Chen’s insights are very profound.” A smile appeared on Wei Li’s face. “The stability and development of Hutchison Whampoa do indeed require full communication and consensus among board members.”

I greatly appreciate Sugar Capital's long-term perspective and respect for professional management as a shareholder. I believe that as long as our goals align, Hutchison Whampoa's future is promising.

“Of course.” Chen Bingwen smiled and raised his coffee cup. “Good communication is the foundation of cooperation.”

For Hwang's future.

"For the future of Hutchison Whampoa." Wei Li also raised his glass in a gesture of respect.

The two reached a tacit agreement.

Chen Bingwen knew that bringing Wei Li, the chairman of the board who was familiar with the internal affairs of Hutchison Whampoa and harbored resentment towards HSBC and the Li family, to his side was a crucial step.

Now, it's time to see how Li Jiacheng will make his move.

Before leaving, Chen Bingwen said to Wei Li, "Chairman Wei Li, in Yingni, Qingzhou, we plan to redevelop the old factory site in Hung Hom into a modern food and beverage industrial park."

In the future, it may generate synergies with some of Hutchison Whampoa's businesses in warehousing and logistics, real estate development, and even some raw material procurement.

We hope Chairman Wei Li will provide his full support at that time.

Wei Li smiled and said, "Huahuang has always been open to cooperation that benefits both parties."

Chen Bingwen nodded.

He knew that although it was too early to discuss specific cooperation, laying the groundwork now would allow him to gain a deeper understanding of Hutchison Whampoa's internal operations and personnel through these business dealings, thus preparing for potential future opportunities.

After all, even a fallen camel is bigger than a horse. Although many of the 315 subsidiaries under Hutchison Whampoa during the reign of Kingston Chan were dismantled and sold off under Wayne Li, a number of high-quality assets were still left behind.

Companies like Hutchison Properties, Junyi Warehouse (warehousing and logistics), Harbour Engineering (construction and civil engineering), and Hutchison Whampoa (trading and retail) remain important sectors under the Hutchison Whampoa Group.

Even if it's not possible to fully acquire Hutchison Whampoa in the short term, it's always beneficial to leverage existing business relationships to allow subordinate teams to gradually connect, understand, and integrate with the company.

A few days later, at the headquarters of Cheung Kong Holdings.

Li Jiacheng sat in his office, listening to his secretary Hong Xiaolian report on the completion of the final procedures for the transfer of shares in Hutchison Whampoa.

"Mr. Li, the 10.65% stake in Hutchison Whampoa under HSBC has been officially transferred to Cheung Kong Holdings."

We are now a legitimate and significant shareholder of Huang Ming.

Hong Xiaolian had a hint of excitement on her face.

Compared to Hong Xiaolian's excitement, Li Jiacheng's face did not show much joy.

The setback at Qingzhou Yingni made him more cautious, as Cheung Kong Holdings had only just acquired one-third of Hutchison Whampoa's shares from HSBC.

Next, the trading will continue, but at the current pace, it's unclear how long it will take.

If anything unexpected happens during this period, the outcome could be unpredictable.

"Next, in the name of Cheung Kong Holdings, we will formally send a letter to the board of directors of Hutchison Whampoa, requesting that a representative be appointed to the board of directors in accordance with the shareholding ratio."

Li Jiacheng gave the instructions.

"Mr. Li, who should we send to the board of directors? Will you go in person?"

Hong Xiaolian asked.

Li Jiacheng pondered for a moment, then shook his head: "I won't go in directly for now."

Let Vice Chairman Zhou Jinqian go first.

He is experienced and steady in his work, so let him familiarize himself with the situation and observe the prevailing sentiment within the board of directors.

Tell him to observe more and speak less, and pay particular attention to what Wei Li and Chen Bingwen are up to.

"Understood," Hong Xiaolian replied.

Zhou Jinqian is one of the founding members of Cheung Kong Holdings and enjoys the deep trust of Li Jiacheng.

“In addition,” Li Jiacheng continued, “we have our people begin to informally contact the heads of several major subsidiaries of Hutchison Whampoa, such as the heads of Hutchison Properties and Junyi Warehouse.”

Learn about their business and ideas.

Be mindful of your approach; don't be too deliberate.

Li Ka-shing was well aware that to truly control Hutchison Whampoa, it was not enough to just be at the board level; he needed to gain the approval or support of the management of the core business segments.

Having operated for many years, Wei Li certainly has influence in these areas.

"Yes, Mr. Li. I will arrange it properly." Hong Xiaolian accepted the order and left.

Li Jiacheng sat alone in his office, lost in thought.

Securing a stake in Hutchison Whampoa is only the first step; the key lies in the subsequent shareholdings.

He knew that Wei Li wouldn't give up easily, and that Chen Bingwen who suddenly appeared was no pushover either.

The upcoming board meeting is unlikely to be peaceful.

He picked up a report about the recent unusual stock price movements and market rumors surrounding Qingzhou Yingni, his brow furrowing slightly.

Chen Bingwen has been making frequent moves over there, from planning industrial parks to releasing positive news, clearly aiming to quickly boost the market value.

What does he want to do?
Is this in preparation for subsequent capital operations?

Li Jiacheng had a vague feeling that Chen Bingwen's scheme might not be as simple as just Qingzhou Yingni.

(End of this chapter)