In Hong Kong, we build a global business empire

Chapter 785 The Governor-General is Putting Pressure on Me? I Won't Fall for That Forced Sale!

Just as Lin Haoran and He Shanheng reached a preliminary consensus on how to respond to Standard Chartered Bank and were preparing to make arrangements, the dedicated phone on He Shanheng's desk rang.

He Shanheng answered the phone, listened for a few minutes, his expression turned slightly serious, and then covered the receiver with his hand and whispered to Lin Haoran, "It's a call from the Governor's Office. Governor Mai Lihao is looking for you personally and hopes you can answer the phone."

Lin Haoran raised an eyebrow and exchanged a knowing look with He Shanheng.

At this critical juncture, the governor personally called, the reason for which the two men understood each other without saying a word.

As the Governor of Hong Kong and the British government's appointed regional governor, Meryl Streep naturally controlled a very powerful government intelligence agency.

Therefore, as soon as Lin Haoran's private jet returned to Kai Tak Airport, Mai Lihao already knew about it.

Lin Haoran calmly took the microphone, his tone calm yet respectful: "Governor, good afternoon, I am Lin Haoran."

The voice of Mak Lei-ho came from the other end of the phone: "Mr. Lin, welcome back to Hong Kong. I heard you just arrived this morning, and I shouldn't bother you immediately. However, there is an important matter concerning the financial stability and development of Hong Kong that I hope to discuss with you as soon as possible. Would it be convenient for you to come to the Governor's House for a meeting, Mr. Lin?"

Lin Haoran understood that this must be about the right to issue currency.

He readily agreed: "It is my honor to be personally invited by the Governor. I happen to be at the Recreation Building and can go there now."

“Very well, then I will await your arrival at the Governor’s Mansion.” Meryl Streep’s tone sounded quite satisfied.

After hanging up the phone, Lin Haoran handed the receiver back to He Shanheng.

"As expected, they're here for the right to issue currency. It seems that Standard Chartered Bank not only sent us a letter, but also likely put pressure on the Governor's Office, or at least communicated with them," He Shanheng said, frowning.

Lin Haoran straightened his suit cuffs, his expression calm: "That's good. It's a good opportunity to sound out the Governor's Office and see what their bottom line and attitude are on this matter."

"Uncle He, the initial contact between Hengsheng and Standard Chartered Bank will proceed as we just discussed. I'll go and meet with this Governor first."

"Don't worry, I know what to do." He Shanheng nodded. "When you go there, you also need to act according to the situation. The attitude of the Governor's Office is crucial."

Lin Haoran nodded. He had dealt with Mai Lihao many times and they were old acquaintances.

Soon after, Lin Haoran's car smoothly drove into the Governor's House, located in the Mid-Levels of Central.

The iconic building appears solemn and dignified, nestled among the greenery.

Guided by the staff, Lin Haoran was directly invited into Governor Merrihao's reception room.

Unlike the governor's office, which is quite formal, the atmosphere here is relatively relaxed.

Governor Merrihout personally greeted him at the door and warmly shook hands with Lin Haoran: "Mr. Lin, please sit down. I know you have had a long journey, but I still specially invited you here because this matter is of great importance."

The two sat down on a comfortable sofa, and the waiter quietly withdrew after serving them red tea.

Mai Lihao picked up his bone china teacup, took a sip, and continued, "Mr. Lin should have guessed why I'm here to see you. I won't beat around the bush."

Mr. Lin's Hang Seng Group wants the right to issue currency. Logically speaking, given Hang Seng Group's current situation, it is only natural for it to have the right to issue currency. However, it is against the rules for a private bank to obtain the right to issue currency.

The reason I have not agreed is that Mr. Lin's Hang Seng Bank and Bank of East Asia are both privatized companies and have no British influence whatsoever. If this precedent is set, the Hong Kong government's credibility will inevitably be damaged. Mr. Lin, this matter concerns the overall situation; please understand.

Lin Haoran was not surprised when he heard this; it was all within his expectations.

Lin Haoran gently put down his teacup and calmly met Mai Lihao's gaze: "I understand the Governor's concerns. The stability of the financial system and the seriousness of the rules are indeed the cornerstone of Hong Kong's prosperity and cannot be easily shaken."

His tone was sincere, without the slightest hint of dissatisfaction at being made difficult, which made Mai Lihao nod slightly, a hint of appreciation flashing in his eyes.

"It is truly gratifying that Mr. Lin is so righteous."

Mak then steered the conversation further: "However, for a powerful organization like Heng Sheng Group that has made outstanding contributions to Hong Kong, the government is willing to seek a win-win solution within the framework of the rules."

He crossed his legs and his tone became more suggestive: "I wonder if Mr. Lin has considered indirectly obtaining this qualification by acquiring an existing bank that issues banknotes? For example... Huifeng Bank. In that case, it wouldn't be difficult for my Governor's Office."

Sure enough.

Lin Haoran sneered inwardly. Standard Chartered Bank's reach had already extended to the Governor's Mansion, or rather, the two were already in cahoots.

The Governor-General's Office's intervention to meet with the officials was merely an attempt to exert pressure.

With a thoughtful expression on his face, he slowly said, "Acquiring Huifeng? That is indeed a feasible path, but I have never really considered this before."

Your Excellency, as far as I know, the situation at Huifeng Bank is quite complicated. Its subsidiary in the United States, Haifeng Bank, has been losing money year after year and has become a heavy burden.

Moreover, Huifeng Bank has suffered a significant loss of customers in Hong Kong, and its asset quality has deteriorated considerably. Such a so-called 'opportunity' may come at a considerable cost.

Most importantly, if I were to take over Huifeng Bank, I would have to fill its debt funding gap, and the amount of funds required to advance would be far too large, which I felt was simply not worthwhile.

Although Huifeng Bank has many mortgage customers, if all of them can be brought back, there will be no need to worry about debt issues.

But this will take at least two or three years, and given the current economic downturn, there is also the possibility that customers may be unable to repay their loans.

"Wouldn't I be the one getting ripped off if I took over Huifeng Bank?"

Before Standard Chartered acquired Huafeng Bank, Huafeng Bank was suffering from a cash redemption boom and soon fell into a predicament of broken capital chain.

After acquiring Huifeng Bank, Standard Chartered Bank invested two to three hundred billion Hong Kong dollars in financing to revitalize the bank.

Several months have passed, and although Huifeng Bank has recovered some funds, it still owes Standard Chartered Bank at least HK$20 billion.

As things stand, if Hengsheng Group were to provide Huifeng Bank with 20 billion yuan in cash flow as a bridging loan, Hengsheng Group would indeed be able to come up with the money, and could even provide double that amount, but it would simply not be worth it!

Upon hearing this, a glint of light flashed in Mai Lihao's eyes; he had been waiting for Lin Haoran to say those words.

“Mr. Lin’s concerns are indeed reasonable.” He gently put down his teacup and said in a slow and unhurried manner, “I have already discussed this matter with Mr. Tyron from Standard Chartered Bank.”

The debts between Standard Chartered Bank and HSBC have been subject to very strict phased repayment agreements. As long as the corresponding interest is paid on time, the principal will be repaid to Standard Chartered Bank upon maturity.

If Hengsheng Group takes over Huifeng Bank, it will not face additional pressure.

As for the Haifeng Bank you mentioned, it is indeed currently operating at a loss. However, I think it wouldn't be too difficult for Mr. Lin to sell it if he wanted to.

After all, SITC is the thirteenth largest bank in the United States, so it must have a lot of potential customers, right?

Merrihout continued, “Any business decision carries risks, but also opportunities. The value of Huifeng Bank’s century-old brand, international network, and most importantly, its right to issue banknotes is beyond question.”

Moreover, every investment carries risk or reward; the key lies in how Mr. Lin views the risks and returns, and how much determination he is willing to make.

This is quite blunt – if you want the right to issue currency, you have to take over Huifeng's business and be prepared to pay the price.

Lin Haoran knew that on the core issue of the right to issue currency, the Governor's Office and Standard Chartered Bank had reached a tacit understanding, putting him in a corner.

A direct refusal would not only mean that the right to issue currency would be lost in the short term, but could also completely worsen relations with British capital and the Governor's Office.

But Lin Haoran has never been someone who can be easily manipulated.

"The Governor's guidance has enlightened me," Lin Haoran said slowly, his tone regaining its composure. "Acquiring Huifeng Bank is indeed an option worth serious consideration."

However, since this is a business negotiation, it must naturally follow business rules. Hengsheng Group will not ignore the potentially huge risks and become a buyer regardless of cost simply because of its desire for the right to issue currency.

He stood up, walked to the window, looked at the meticulously manicured plants in the Governor's Garden, and with his back to Merrih, continued, "If Standard Chartered Bank truly wants to facilitate this deal, then they also need to show sufficient sincerity."

Otherwise, even if Hengsheng Group desperately desires the right to issue currency, it would be impossible to explain to its employees and partners who trust it that it would take over an asset it knows is a trap.

Lin Haoran turned around and looked intently at Mai Lihao: "I believe that Standard Chartered Bank and the Governor's Office both hope to see a healthy and stable Huifeng Bank after the transaction is completed, rather than a mess that may eventually cause greater financial turmoil. This is also in line with the overall situation of Hong Kong's financial stability, isn't it?"

Moreover, I don't like doing business at a loss. If I'm forced to acquire this company without sufficient profit, wouldn't that be coercion?
Furthermore, the contract my company signed with Standard Chartered Bank did not include a mandatory takeover clause. If Standard Chartered Bank fails to obtain the right to issue currency by the due date, it is their responsibility, and they will have to pay whatever price they are required to pay.

His words expressed both a willingness to negotiate and a clever way of passing the buck back to Standard Chartered Bank, clearly stating that Standard Chartered must take responsibility for clearing up Huifeng Bank's most troublesome problems; otherwise, he had no interest in Huifeng Bank.

Lin Haoran did not reveal the "time bomb" that was Jia Ning Group. After all, although the real estate industry in Hong Kong was in a downturn, it had not yet reached the point of a real estate crisis. Housing prices were relatively stable, only the transaction volume had decreased significantly.

In other words, the Caring Group has not yet collapsed, and neither Huifeng Bank nor Standard Chartered Bank has yet discovered this potential crisis.

Lin Haoran naturally wouldn't reveal this secret weapon beforehand.

If he does ultimately acquire Huifeng Bank, he will try to pass the "time bomb" of Caring Group to Standard Chartered Bank during the negotiations, so that Standard Chartered Bank can enjoy this "gift".

He hadn't forgotten that when Brown was the head of Standard Chartered Bank, Standard Chartered had repeatedly joined forces with other consortia to target his companies.

Although Standard Chartered Bank's new tycoon, Tyronn, personally visited to apologize and stated that he would never be an enemy of Lin Haoran in the future.

But how could this feud be resolved so easily?

Moreover, after Standard Chartered Bank felt that Huifeng Bank had little value, it wanted him to take over, clearly intending to make him a sucker.

Undeniably, he was indeed somewhat interested in Huifeng Bank, a century-old bank. But that was contingent on dealing with Huifeng Bank's most troublesome problems.

Returning this "gift" from the Caring Group to Standard Chartered Bank would be the most suitable course of action.

Mai Lihao's deep gaze met Lin Haoran's for a moment, and he understood Lin Haoran's subtext—Hengsheng could discuss acquisition, but whether it would succeed or not depended on Standard Chartered Bank's sincerity.

This young business tycoon was more shrewd and ruthless than he had imagined.

"Business negotiations are naturally a matter of mutual consent and weighing the pros and cons. I certainly won't use the government to force Mr. Lin to acquire a company. As for the contract between Mr. Lin and Standard Chartered Bank, that's your private matter, and I can't interfere. You can decide for yourselves." Mak finally gave a formulaic smile. "I will convey Mr. Lin's concerns to the relevant parties."

I hope both sides can adopt a pragmatic approach and find a path that benefits both parties and Hong Kong.

He didn't make any explicit promises, but "conveying concern" in itself is an attitude.

"Then thank you very much, Governor." Lin Haoran knew that the purpose of today's meeting had been achieved, so he stood up to take his leave. "I look forward to hearing from you."

After leaving the governor's mansion and getting into the car, Lin Haoran's expression calmed down.

The situation has become clear: acquiring Huifeng Bank seems to be the only viable path to obtaining the right to issue banknotes.

But this is destined to be a tough battle, a fierce negotiation with Standard Chartered Bank at the negotiating table over the allocation of price, risk and liability.

He needed to return immediately to conduct in-depth research with He Shanheng and the core think tank of Hengsheng Group to formulate a detailed negotiation strategy and bottom line.

At the same time, he must also prepare for another possibility—what to do if the negotiations break down?

Is the plan to temporarily suspend the banknote issuance rights and directly sue Standard Chartered Bank for the HK$30 billion?
Or should we explore alternative paths and find other ways to break the deadlock?

Don't be fooled by the fact that the other party has clearly stated that this is a private matter between him and Standard Chartered Bank and that he will not interfere too much.

But in reality, his appearance already represented a certain attitude.

This is tantamount to telling Lin Haoran that the Governor's Office will favor Standard Chartered Bank.

This is normal, and Lin Haoran understands.

This is, after all, Hong Kong, a colony still under British rule.

The attitude of the Governor-General's Office can often play a decisive role at crucial moments.

However, it's impossible to get him to just bow his head and follow someone else's path.

When Lin Haoran left the Governor's House, the twilight of Victoria Harbour had already painted the horizon.

Governor Merrihau's attitude was clear: for reasons of stability and "custom," the Hong Kong government obviously preferred to allow Hang Seng to obtain the right to issue banknotes through the "shortcut" of acquiring HSBC Bank, rather than making an exception for a private bank without British capital.

What appears to be a promising path is actually a trap disguised as honey – Standard Chartered is eager to get rid of Hui Fung, and the Governor's Office is happy to see it happen, but all the pressure is shifted onto Hang Seng.

The 42nd floor of Kang Le Building houses the headquarters of Hengsheng Group.

Outside the office's round window, the lights of Victoria Harbour lit up one after another, dazzling and eye-catching, yet they couldn't reflect the solemnity in He Shanheng's brow at that moment.

Lin Haoran has just returned here.

"Uncle He, the Governor's Mansion has finally revealed the truth."

Lin Haoran unbuttoned his suit jacket, sat down in the large leather chair, and said in a calm but cold tone, "They want us to take on this hot potato of Huifeng before they'll agree to issue currency. Standard Chartered's plan is really clever."

He Shanheng nodded and handed over a document he had just received: "Haoran, our people who contacted Standard Chartered just reported back that Tyron has made an offer."

"Oh?" Lin Haoran raised an eyebrow, took the document, and quickly scanned the key figures. A sneer immediately appeared on his lips. "Fifty billion Hong Kong dollars?"

Haha, Standard Chartered Bank has quite the appetite. Does they really think Huifeng is still the financial tycoon of Hong Kong it once was? They're treating Hengsheng like a sucker to be slaughtered!

The document clearly outlines Standard Chartered Bank's intention to sell: it is willing to transfer its 51% controlling stake in Huifeng Bank to Hengsheng Group for HK$5 billion.

If this were the old Huifeng Bank, it would have been worth more than HK$5 billion, even HK$20 billion.

But now?
It's important to understand that Huifeng Bank has not only lost most of its British corporate clients, but also Hutchison Whampoa and Cheung Kong Holdings. Its market share continues to decline, its internal client resources have been almost completely drained by Standard Chartered and Hang Seng, and it is also burdened by the heavy burden of Haifeng Bank, which is located in the United States and has suffered huge losses year after year.

Its true value has already been greatly reduced, and asking for 5 billion is undoubtedly an outrageous demand, full of the flavor of profiteering.

The document also details how they made their bids.

Firstly, Huifeng Bank still has a financial share of over HK$20 billion, a large number of lending customers, a good customer base, and a century-old brand.

In addition, they spent a total of US$3.41 million to acquire 51% of the shares of SITC Bank, which would be equivalent to about HK$17 billion even if sold at the original price.

In addition, there are overseas assets such as the Bank of England in the Middle East and Reuters Bank. Taking all of these together, Standard Chartered Bank felt that asking for HK$50 billion was not excessive.

"What is the current market value of Huifeng Bank?" Lin Haoran looked up at He Shanheng and asked.

He Shanheng said with a smile, "According to the latest data, Huifeng Bank's market value is currently stable at around HK$24 billion."

In fact, under Standard Chartered Bank's management, HSBC's total market capitalization once rose to HK$50 billion.

However, recently, Cheung Kong and Hutchison Whampoa gradually withdrew their financial businesses from HSBC, causing HSBC's market capitalization to fall below HK$20 billion at one point, before slowly recovering and stabilizing at around HK$24 billion.

"A listed company with a total market value of only HK$24 billion, they actually dare to ask for HK$50 billion? And only for 51% of the shares? This is simply absurd. Do they really think I, Lin Haoran, am a sucker?" Lin Haoran scoffed.

It is undeniable that stock market capitalization cannot represent the true value of listed companies.

Many high-quality companies have market capitalizations that are far lower than their actual asset value. Even though Huifeng Bank has suffered significant market share losses in Hong Kong, its extensive overseas network and century-old brand still hold enormous potential.

Even so, the price of HK$50 billion is clearly out of touch with reality.

This seems more like Standard Chartered Bank testing Lin Haoran's bottom line, or perhaps it's a high starting point they deliberately set for subsequent negotiations.

He stood up, walked to the floor-to-ceiling window, and looked down at the bustling area below.

His global portfolio of businesses and wealth gave him unparalleled confidence.

What is the Governor-General's inclination?
He naturally didn't want to offend the other party.

But he also knew that the Governor's Office definitely didn't want to easily ruin their relationship.

After all, his current influence in the business world and his pivotal economic position in Hong Kong have forced Governor Murray MacLehose to treat him with utmost care.

It is not invincible in the face of absolute strength and determination.

"Uncle He, immediately send a formal reply to Standard Chartered Bank, telling them that the price of 5 billion is an insult to the intelligence of Hengsheng Group, and a trampling on the written contract between the two parties."

If Standard Chartered Bank shows no sincerity in resolving the issue, then there's no point in continuing these acquisition negotiations!

He paused, then said firmly, "Make it clear to Standard Chartered: Hengsheng Group only recognizes contracts!"

The contract stipulates that Standard Chartered Bank must fully assist the banks under the Hengsheng Group in obtaining the right to issue banknotes in Hong Kong within three months, that is, before October 27 this year. Now, there are only five days left until the deadline.

Standard Chartered has only two options: First, to officially grant the approval for issuing banknotes to Hang Seng Bank or Bank of East Asia before 24:10 on October 27!
Second, prepare a penalty of HK$3 billion, not a penny less! As for acquiring Huifeng? Let them find someone else. I, Lin Haoran, will not fall for this kind of forced sale!

"Haoran, this..."

Although He Shanheng knew that Lin Haoran was tough, his direct rejection of the acquisition and reaffirmation of the contract, even going so far as to mention "3 billion in compensation," was tantamount to completely breaking off relations and ignoring the Governor's Office's hints.

The risks are considerable.

As a professional manager, He Shanheng ultimately lacked the confidence that Lin Haoran had when dealing with the government.

Therefore, he will be more cautious in his actions.

"What are you afraid of?"

Lin Haoran saw through He Shanheng's concerns and smiled calmly: "The contract was signed by Standard Chartered, it's in black and white and protected by law."

The Governor's House may have its biases, but the Hong Kong government must uphold the law. As long as we are in the right, the Governor cannot blatantly favor Standard Chartered to the point of disregarding the contract.

Besides, three billion in cash is no small sum for Standard Chartered these days. They want to get rid of a burden, but they're even more afraid of losing money. The tougher we are, the more likely they are to concede and do as I say!

“Understood. Since you’ve decided to do this, I’ll risk my life to accompany you!” He Shanheng no longer hesitated; Lin Haoran’s decisiveness and confidence had inspired him.

He immediately turned around and went out to make arrangements.

(End of this chapter)