Chapter 434: Capital Increase and Investment in Hang Seng

Chapter 434: Capital Increase and Investment in Hang Seng

Chapter 434: Capital Increase and Investment in Hang Seng
Yang Wendong nodded and said, "It seems that he didn't listen to my advice at the beginning, but this is normal. Now it depends on how long he can hold on."

Regardless of whether he helps or not, he will not take the initiative to ask. Even if he is sincere, everyone will be wary and think that you have ulterior motives. This is normal behavior between businesses and even countries.

Zheng Zhijie said: "Mr. Yang, you are also their shareholder. I guess once they run out of funds, they will come to you."

Wei Zetao said: "Not really. Hang Seng is much bigger than what Liu Chongxing had back then. Even if there is a run, it might be able to be stopped. The Hong Kong government will definitely support it. Otherwise, who knows how much of a blow the Hong Kong economy will suffer."

The scale of Hang Seng Bank today is at least three times that of Liu Chongxing, and many of Liu Chongxing's loans were given to himself, while Hang Seng gave loans to many other companies. If something goes wrong with it, the impact will be much greater.

Yang Wendong said: "The Hong Kong government will not do charity. It is precisely because Hang Seng Bank is large in scale and its assets are considered high-quality. Tell me, who wouldn't be jealous?"

Wei Zetao nodded and said, "Yes, it depends on whether Hengsheng can convince depositors not to withdraw their money in the next few days."

"It's very difficult. Depositors are all in a panic." Yang Wendong shook his head and said, "Anyone would be willing to lose a little interest to keep the principal."

Zheng Zhijie also said: "Yes, back then, Liao Chongxing was also bankrupted by a run on the bank in just over ten days, and there was no time to sell off the assets. This bank looks prosperous, but it is actually extremely risky."

"Yes, for a company like ours, failure in operation will not lead to immediate bankruptcy. It will take a long time. But for banks or some financial institutions, once problems occur, it will be an avalanche." Yang Wendong said with a faint smile: "Now we just have to see how He Shanheng responds."

The banking industry often seems to have it easy, using depositors' money to lend money to businesses. In this process, except for a few special cases, the lenders always ask the banks for help, and the funds that banks can mobilize are very large, far exceeding their own scale.

But the risk is that once a little bit of bad news triggers a run on the bank, it will be all over. Not only will you lose everything, you may even end up in jail.

Therefore, although Yang Wendong knew the benefits of banks in the early days, he did not participate. One reason was that his golden finger was of little help in this regard; the second was that it could easily become a major weakness of his own group; and the third was that his real estate, shipping and even industry required the help of other large banks. Once he had a banking industry, it would be difficult to cooperate.

Therefore, it is not cost-effective for him to work in the bank in the early stage. He should consider this matter again when he becomes stronger and has a ZZ background behind him.

In the following days, every branch of Hang Seng Bank in Hong Kong was surrounded by countless depositors, each of whom wanted to withdraw their money.
At the Hang Seng Bank headquarters in Central, a man with glasses came over quickly and said, "Mr. He, our funds are almost gone."

"Didn't we just recover 4000 million Hong Kong dollars the day before yesterday? It's gone so quickly?" Ho Sin Hang asked with a changed expression.

The man with glasses said, "Yes, there are too many people withdrawing money. Each person withdraws thousands or tens of thousands of yuan. I have already asked everyone to persuade the depositors, but the effect is minimal, and more and more people are withdrawing money."

Ho Sin Hang asked again: "Did you ask the salesperson to withdraw money more slowly, to slow down the process?"

"We have tried it, but it will lead to longer queues, and media publicity will only attract more people." The man with glasses explained: "And if we do this, it will cause conflicts among people in the queue. Previously, people in several branches were beaten by depositors who were rushing them. Calling the police was useless, and some policemen also wanted to withdraw money."

He Shanheng frowned immediately. He had been trying his best to raise money, but the speed at which he could raise money was no match for the speed at which he could withdraw money.

At this time, another person came to report and said, "Mr. He, someone from the Lin family asked someone to ask what the current financial situation of Hang Seng Bank is. He hopes that we can tell the shareholders the truth."

"We are not listed yet, what's the point of telling him? He can't cash out either." He Shanheng paused and said, "But there is no other way at the moment. Ah Wei, hold a shareholders' meeting immediately and let all shareholders attend."

"Yes." After agreeing, Awei left quickly.

Yang Wendong, who received the news, naturally came to the Hang Seng Bank Building the next day;

"Mr. Yang." He Shanheng warmly welcomed every shareholder who came.

Yang Wendong said: "Mr. He, you have been under a lot of pressure during this period."

"The most frightening thing for a banker is to encounter something like this," said Ho Sin Hang with a sigh. "Hang Seng Bank obviously had no problems, but it was still subject to a run. It was really an unexpected disaster."

Yang Wendong said: "This is how business works. It depends not only on strength but also on luck. Sometimes you get dragged down by others and there is nothing you can do about it."

"Yes, please come in." He Shanheng said, pointing inside.

"Okay." Yang Wendong agreed and walked in.

Those who came to the scene all had some status in Hong Kong, and many of them were the second generation of wealthy families from a long time ago. However, these people basically declined in the 1967s and s, or they were really very low-key; it is very likely that they did not survive the economic crisis of , or directly immigrated.

There are also the early founders Lin Bingyan, Liang Zhiwei, Sheng Chunlin and He Tian.

After a while, when more than a dozen people arrived, Ho Sin Hang said, "Everyone, you all know the current situation of Hang Seng Bank. As for the funding issue you are concerned about, I can tell you that Hang Seng Bank's funds are currently exhausted. This is the result of my previous borrowing from everywhere."

This matter certainly cannot be concealed. If depositors cannot withdraw their money, it will be known to the whole of Hong Kong. Even if they go out to borrow money, it will cause trouble. Everyone present has spies in Hong Kong.

"So fast?" Many people whispered to each other. Although they knew the situation was not good, they did not expect it to happen so quickly.

"Mr. He? What should we do next?" another person asked.

Ho Sin Hang said: "I hope that all shareholders can join hands to raise a sum of money, part of which will be used as capital injection in proportion, and the other part will be used as a loan to Hang Seng Bank;
I can guarantee that as long as Hang Seng Bank can get through this, your loans will definitely have very high interest returns.”

After he finished speaking, everyone at the scene frowned, and a few people discussed in a low voice. Even Yang Wendong remained silent.
In fact, if he had not known that HSBC would provide a guarantee in the end, he would not have dared to invest the money. The former Liu Chong Hing Bank was a lesson for him. The Hong Kong government only managed to protect the deposits of most ordinary depositors. Those investors, shareholders, and even borrowers all suffered heavy losses to varying degrees. How could the Hong Kong government possibly bear this?

Seeing that many people were embarrassed, He Shanheng said, "Let's put it this way. If we don't help, your previous investment will also go down the drain. Only by helping will there be a chance."

"But if we invest money and Hang Seng still fails, wouldn't the loss be even greater?" A man in his 30s said coldly: "Mr. He, everyone invested in Hang Seng Bank because they trusted you. Now that Hang Seng has become like this, don't you take any responsibility?" "Mr. Li, if it was my problem, I would definitely take responsibility." Ho Sin Hang also said with a bad face: "But the run on Hang Seng Bank is completely an unprovoked disaster. No one in my position can avoid this;
Right now, the most important thing is not to pursue responsibility, but to save Hang Seng. Please prioritize. If Hang Seng can survive, you can ask a third-party review agency to investigate in the future. If there are any problems on my part, I will naturally take responsibility. "

Everyone at the scene fell silent again. The disaster of Hang Seng Bank could not be blamed on Ho Sin Hang. This was a disaster for all Chinese banks in Hong Kong.

At this time, Yang Wendong said: "Everyone, what Mr. He said is still very right. The most important thing right now is to solve the problem. We can talk about responsibilities later."

Seeing Yang Wendong say this, no one else knew what to say, and He Shanheng also looked at him with gratitude.

Although no one was held accountable anymore, it was still difficult to get shareholders on site to invest again. More than an hour passed and no one took the lead. Instead, everyone just found some excuse to leave.

In the end, only a few founders of Hang Seng Bank, plus Yang Wendong and another person were left.

He Shanheng finally said, "Mr. Yang, shall we go to the side?"

"Okay." Yang Wendong nodded and agreed.

The two soon came to a small green lawn downstairs. He Shanheng sighed and said, "Mr. Yang, you were right to suggest that I keep more funds in my hands. But I was too greedy and still put the funds out."

"I was just guessing, I didn't expect it to come true." Yang Wendong added: "From the bank's perspective, Hang Seng Bank itself is operating normally and has good risk control. There is really no reason for it to hold a large amount of cash, which will inevitably lead to a considerable loss."

"Yes, I was very confident at that time, but I didn't expect to be squeezed for no reason. I was really unwilling to accept it. Obviously, I have always controlled the risks very well." He Shanheng paused and said, "Mr. Yang, right now, I hope you can save Hengsheng."

"Do you want me to lend some money to Hang Seng?" Yang Wendong asked.

Ho Sin Hang said: "It would be better if we can borrow, but I hope Mr. Yang can stand up and support Hang Seng. With Mr. Yang's reputation in Hong Kong, if he stands up, many people will stop withdrawing money. This is the best way to deal with the run."

"Mr. He, I may not have such strength." Yang Wendong shook his head and said, "Although Changxing Group is doing well, the deposits in Hang Seng Bank should be 700 to 800 million. I can't guarantee such a large amount of funds."

Changxing Group's current annual profit has exceeded 100 million yuan, and it has hundreds of millions of cash in its accounts and a lot of US dollars overseas, but these are all top secrets within the company, and not many people in the entire Changxing Group know about them.

To the outside world, although Changxing Group is very large, most people are not sure whether it has hundreds of millions, after all, it is not listed; and assets and cash are two different things. Many companies with a market value of 10 billion may not be able to come up with or million in cash.

The most important thing is that this matter is too much of a loss for him. With such a big risk, what kind of benefit can he get? Naturally, he would not do it.

"But at least it can alleviate the situation." He Shanheng added: "I know this is a high request, but please consider it, Mr. Yang."

"Mr. He, I can't possibly promise to cover Hang Seng's deposits. On the contrary, Mr. He, would you help others in this way?" Yang Wendong asked in return: "If Hang Seng had no problems today and East Asia was severely run, and Li Fushu also approached you in this way, would you agree?"

He Shanheng also fell silent. He knew that this request was excessive, but there was no other way at the moment.

Yang Wendong continued, "However, I can help you with the funds, but I don't just want interest, I want shares."

Helping others naturally requires rewards. As a time traveler, there are so many places where you can invest, so naturally you won’t care about a little bit of interest.

"Then how many shares does Mr. Yang need? How much money can he invest?" He Shanheng asked.

We are not doing charity. If we can help, we must have benefits. And if the other party wants shares, it will actually pull the other party into the same boat, which is a good thing in the short term.

"I can give you 5000 million Hong Kong dollars, and as for the shares, I want 25%." Yang Wendong quoted his price.

He Shanheng's face changed and he said, "Mr. Yang, this price is too low, isn't it? In the previous financing, my Hang Seng Bank was valued at 3.2 million. Now it's only 2 million. Isn't it too low?"

"In this situation, I am also taking a huge risk." Yang Wendong said, "Mr. He, put yourself in my shoes. My valuation is really not excessive."

In fact, if he didn't know that the Hong Kong government and HSBC would eventually save Hang Seng, he would not have made this deal. If Hang Seng went bankrupt, he would lose a lot of money.

"Then Mr. Yang also wants the rights of a director?" He Shanheng asked again.

Yang Wendong nodded and said, "Yes, according to the law, I should have the right to vote for one seat."

Hong Kong law stipulates that a joint venture company must have at least five board seats. Once one person holds 5% of the shares, he or she will have one vote. If the company itself sets more than five board seats, the number of voting rights will be apportioned proportionally.

"I need to think about it." He Shanheng said with a frown.

"Okay, the funds will be in place as soon as possible, but if Mr. He disagrees, please let me know." Yang Wendong nodded and said.

Although our Hong Kong dollars are gradually being converted into US dollars, it still takes time. It is just the beginning now. Changxing Group still has a lot of Hong Kong dollars, so it is appropriate to spend them here.

"Okay." He Shanheng agreed.

After returning to Changxing Building, Yang Wendong called Zheng Zhijie and Fang Xianming, the head of Changxing Financial Company, and said, "You two should work together this time to contact the current shareholders of Hang Seng Bank to see if they are willing to sell their shares."

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(End of this chapter)