Chapter 258 Preliminary Achievement
After failing to find a buyer for the Bank after more than a week, the Financial Secretary announced at the Legislative Council meeting on April 4 that he would apply to the High Court for the liquidation of the Bank.

The Hong Kong government is prepared to advance HK$20 billion and distribute 30% of deposits to depositors (with a maximum amount of HK$50).

When the news came out, depositors waiting outside the Legislative Council became emotional. Some even rushed to Queen's Road Central and sat on the road to block traffic to vent their dissatisfaction.

Finally, Party J used force to clear the area and arrested several people before traffic was restored.

At the same time, the liquidation of China Merchants Bank brought an impact on banks with a Middle Eastern background. Bank runs occurred in Dao Heng Bank and Hong Kong Commercial Bank (formerly Sun Hung Kai Bank).

Even Standard Chartered Bank and Citibank began to suffer bank runs.

As things escalated, Liu Zhicheng knew it was time for him to step in!
He immediately formed an advisory team consisting of financial experts from Hongli Investment.

However, he has remained silent even though as early as April 4, China Banking Regulatory Commissioner Zhuo Shengcai revealed to the media that two consortiums were very interested in acquiring China Merchants Bank and the acquisition was expected to be successful.

However, Liu Zhicheng knew that without the foreign exchange fund guarantee for the bad debts of Guoshang Bank, no one would dare to acquire it.

He did not intervene immediately because he was still planning to be a "white knight" and "gain favor" from the citizens of Hong Kong, and keep all the money in his own bank in the future.

The Financial Secretary has only applied for liquidation, and the High Court will also give a time for "temporary liquidation", so Liu Zhicheng still has enough time.

Heroes always come at the most critical moment!
Liu Zhicheng, accompanied by several advisers, stormed into the Financial Secretary.

The director, Zhai Kecheng, was a British man. He welcomed everyone with officials from the Finance Department and the China Banking Regulatory Commission.

They never imagined that Liu Zhicheng, the richest Chinese, would be interested in "Guoshang Bank".

After everyone sat in the conference room, Zhai Kecheng said, "Mr. Liu, to be honest, I'm very surprised. I didn't expect you to be interested in Guoshang Bank!"

Liu Zhicheng said hypocritically: "I just couldn't bear to see the depositors' money lose value after several years, so I suddenly came up with this idea."

Everyone in the conference room looked at each other in bewilderment. Are there such kind-hearted capitalists in this world?

Zhai Kecheng smiled and said, "Mr. Liu is indeed a philanthropist!"

His term of office is about to expire, and such an incident will inevitably affect his reputation. If someone else takes over, why not?

Liu Zhicheng said: "Then, we need to understand the specific situation of Guoshang Bank. Is the information ready?"

Zhai Kecheng gestured, and then the banking regulatory commissioner Zhuo Sheng took out a document and gave it to Liu Zhicheng's consultants.

Liu Zhicheng took the time to say, "According to an investigation by one of my reporters, Guoshang Bank still has billions of unrecorded debts overseas. I wonder if you have found any of them?"

Suddenly, people from the Financial Secretary and the Banking Regulatory Office showed incredible expressions.

Zhai Kecheng said honestly: "Since it is an unrecorded debt, how did Liu Sheng's reporters know about it? We haven't found anything here!"

Liu Zhicheng said: "This has to be kept secret! Because after the reporter learned that two overseas reporters may have died suddenly while investigating this matter, he no longer dared to show up.

Besides, Guoshang Bank must have borrowed money illegally overseas. I believe you can guess it, but the creditors have not come forward yet!"

Zhai Kecheng nodded and said, "We did have some guesses, but we won't make an exception to guarantee you!"

Liu Zhicheng frowned, then said, "I believe the Hong Kong government does not want to see this matter in this state. It is still in the temporary liquidation stage. The Hong Kong government is also willing to see someone acquire Guoshang Bank, right?"

Zhai Kecheng said: "Having said that, the Exchange Fund cannot be used as a guarantee. This is the opinion of our Legislative Council of the Hong Kong Government.

Moreover, if the foreign exchange fund is willing to guarantee, the previous financial groups may have reached an agreement with us!"

Liu Zhicheng smiled bitterly and said nothing.

Soon, several consultants told Liu Zhicheng about the review, and he became a little hesitant.

The amount owed to external depositors is HK$66.66 billion, and the HK$20 billion taken out by the Hong Kong government is a loan.

In other words, if he withdraws all the money from depositors, he will be in debt of HK$66.66 billion, not to mention the possible unrecorded overseas loans of HK$20 billion.

In fact, what Liu Zhicheng didn't know was that in his previous life, the deposit was 80 billion Hong Kong dollars, and the Hong Kong government only took out 25 billion Hong Kong dollars, which accounted for 25%. In other words, detonating this bomb in advance reduced the loss of more than ten billion.

Of course, China Merchants Bank also has a lot of assets, including loans, properties, banking networks, etc., which are worth about 50 billion Hong Kong dollars, including some bad debts (deadbeats).

It seems that the loss is only HK$16.66 billion, but the bad debt may reach more than HK$10 billion. In addition, there may be HK$20 billion of unrecorded loans pouring out from overseas, so it really requires nearly HK$50 billion.

Liu Zhicheng remembered that in his previous life, the Chinese Bank was in a temporary liquidation period and was interested in acquiring it.

As a result, they were frightened by the unrecorded loan of up to HK$20 billion and backed out at the last minute.

However, Liu Zhicheng did not intend to retreat.

Of course, he would not agree to the acquisition immediately, but said goodbye to Zhai Kecheng and others.

It is normal for this kind of acquisition to take several months to negotiate, so Zhai Kecheng and others still have great hopes.

After all, Liu Zhicheng is the richest man in Asia.

Hong Kong media reported that Mr. Liu Zhicheng was interested in taking over the China Merchants Bank and was negotiating with the Hong Kong government.

However, some media pointed out that China Merchants Bank may still have nearly 20 billion Hong Kong dollars of unrecorded debt overseas, which is the biggest obstacle to this negotiation.

After all, few consortiums are willing to shoulder such a heavy burden.

Some media also pointed out that as the richest man in Hong Kong, Mr. Liu Zhicheng could not bear to see the depositors of the China Merchants Bank lose all their money and have to wait for years to get back some of their deposits, so he considered intervening.

Some media also pointed out that if the new consortium intervenes in the China Merchants Bank (Hong Kong), it will have to prepare for a "loss" of nearly 50 billion Hong Kong dollars in order to save the China Merchants Bank.

For a time, public opinion was in an uproar.

The depositors of the Guoshang Bank placed their hopes on Liu Zhicheng, and the Hong Kong media raised Liu Zhicheng's status infinitely. Everyone hoped that he would take over this hot potato.

Liu Zhicheng would certainly not agree to the acquisition immediately. The period for "temporary liquidation" of Guoshang Bank was five months, so why should he be in such a hurry?

Therefore, he wanted to wait until the overseas unrecorded creditors of Guoshang Bank appeared before considering whether to acquire the bank.

However, he had not made up his mind to acquire the company, and contacting the Hong Kong government was just a normal business practice;
He needs to carefully weigh the pros and cons and bargain well with the Hong Kong government.

If it really doesn't work, he actually has other options, such as 'Wing On Bank' owned by Hang Seng Bank, which is also an option;

For example, the Overseas Trust Bank owned by the Hong Kong government, I believe he also has great hopes.

Time flies, and two weeks have passed in the blink of an eye.

Beginning of November.

Liu Zhicheng came to Hongli Investment, and Smith returned to Hong Kong to report to him.

Smith reported: "The April S&P 4 futures have been delivered, and the delivery index is 500 points. The average index we bought is 380 points, totaling 317 lots. Each lot made a profit of US$25000, with a total profit of US$1.5 million (HKD3.75 billion), and the funds recovered were 29.25 billion."

Liu Zhicheng nodded with satisfaction. Although there was a slight deviation, it was also expected.

"Return the funds to the Hongli Investment Hong Kong account as soon as possible. I need it for the acquisition of the bank. In the future, this kind of financial investment will be completed in my investment bank.

Therefore, Hongli Investment will become the investment bank of my bank, and you should prepare to be in charge of my investment banking business in the future."

To put it bluntly, there will be a merger, and his future financial consortium will include commercial banks, investment banks, and securities companies.

I have no plan to start an insurance company. The reason is simple: Hong Kong's insurance business is monopolized by London insurance companies, and local insurance companies are basically operating at a loss.

The most important thing about insurance is reputation, and insurance companies that have been in business for hundreds of years have a natural advantage.

Moreover, Liu Zhicheng's acquisition of the bank was only to assist him in his personal investment in financial products. Smith nodded excitedly. He knew Liu Zhicheng's ability and that the financial consortium would become bigger and bigger.

"Okay, boss!"

Liu Zhicheng nodded. He actually knew that if he wanted to take over the China Merchants Bank, it would probably require several billion Hong Kong dollars in funds.

Moreover, he has recently formed a banking team and poached three senior bank executives in Hong Kong, including Li Huimin from Hang Seng Bank.

As expected, Guoshang Bank suddenly had about 18 billion Hong Kong dollars of unrecorded debts, which immediately caused the Chinese Bank (with Chinese background) that had originally intended to take over to immediately announce its withdrawal.

The last hope is that Liu Zhicheng has not yet expressed his position.

As for the depositors of the Guoshang Bank, they were eager to support Liu Zhicheng and hoped that he would accept the Guoshang Bank.

Liu Zhicheng brought his men to the Financial Department again.

In the conference room, Liu Zhicheng said, "Director Cui, our team has changed its mind and hopes to buy Overseas Trust Bank from the Hong Kong government."

Liu Zhicheng changed his strategy and planned to start with overseas trust banks.

Of course, he only wanted to take over the Guoshang Bank, which after all had more than 30 branches and a wide range of business.

The loss is just too big, now it is about 40 billion Hong Kong dollars.

Cui Kecheng immediately shook his head and said, "Mr. Liu, the Overseas Trust Bank is not yet ready for sale. We are now talking about the China Merchants Bank.

Furthermore, we are looking for an experienced team for Overseas Trust Bank!”

Liu Zhicheng smiled and said: "Even the Hong Kong government finds Guoshang Bank difficult to deal with, let alone a businessman like me.

As for the experienced team you mentioned, I have already assembled it. They are all top executives in Hong Kong, and even two of your London bankers have joined my team."

After several hours of negotiations, the two sides reached a preliminary agreement.

…………

Furama Hotel.

Hundreds of representatives of large depositors of Guoshang Bank attended a meeting with a feeling of trepidation but also excitement.

Originally, China Merchants Bank had 45000 depositors, but after a bank run and the Hong Kong government's advance of HK$20 billion to distribute deposits to depositors with less than HK$50, there are currently only about 5000 large depositors left.

After reaching a preliminary agreement with the Hong Kong government, Liu Zhicheng's team was not in a hurry to sign a formal contract with the Hong Kong government.

Instead, they advertised heavily in the media that the Guoshang Bank incident was expected to be acquired by Liu Zhicheng.

Then, large depositors will select more than 500 representatives to participate in the consultation meeting.

"Hello, Mr. Liu!"

"Hello, Mr. Liu!"

But when Liu Zhicheng and his team arrived at the lobby, the depositors of Guoshang Bank greeted them excitedly.

Liu Zhicheng smiled and nodded to everyone.

He walked to the seat arranged on the podium and sat down with a group of consultants.

"Everyone, I called you together this time because I want to discuss something with you! This time I do plan to acquire Guoshang Bank and assume all debts and responsibilities, but I have many concerns." Liu Zhicheng said through the microphone.

When everyone heard Liu Zhicheng say that he had many concerns, they became noisy, but the situation was quickly controlled by Liu Zhicheng's team, who designated someone to speak.

"Mr. Liu, I wonder what you are worried about?" A large depositor stood up and said.

Liu Zhicheng smiled and said, "You are a judge, right? Your name is Huang Qilin?"

The large depositor nodded quickly. He had cooperated with Huangpu Group many times, but he did not expect that Liu Zhicheng would remember his name after only meeting him once.

Liu Zhicheng went on to say: “It’s very simple. I didn’t buy Guoshang Bank for charity, but because I thought it was a long-term investment, even though it would cause me to lose HK$50 billion in the short term.

So, I was worried that once I took over and allowed Guoshang Bank to reopen, a bank run would happen again. I had plenty of money, and a few billion Hong Kong dollars was nothing to me.
But the reputation of Guoshang Bank is in tatters. So there is little point in my acquiring it!"

At this time, everyone looked at each other, and someone raised his hand and said, "Mr. Liu, if we have your guarantee, we can promise that we will not withdraw the deposit before the maturity date."

Liu Zhicheng smiled and said: "My acquisition of Guoshang Bank is the biggest guarantee. I will not do anything that damages my reputation.

But what you said makes sense. You should give me a promise that you big investors cannot withdraw the deposits before they mature.

In this way, you can avoid losing interest and Guoshang Bank can restore its reputation.

After all, you have chosen to trust Guoshang Bank, so citizens can choose to continue to deposit their money in Guoshang Bank!"

"I agree! We had no hope at first, but now we have Mr. Liu, the richest Chinese man, as our guarantor. What do we have to fear?"

"Yes, Mr. Liu's reputation is second to none in Hong Kong. I also promise not to withdraw the deposit before it matures!"

Almost everyone agreed with Liu Zhicheng's suggestion, so the meeting was very successful.

Of course, words are not enough. Liu Zhicheng will put an advertisement in the newspaper asking all depositors of Guoshang Bank to go to the Guoshang Bank branches to register and sign a letter of commitment.

This formed a three-party cooperation and successfully resolved the Guoshang incident.

The Hong Kong media reported the progress of the "Guoshang Bank incident" and gave a lot of praise and hope.

Everyone agreed that the cooperation of the three parties in this Guoshang Bank incident could hopefully lead to a successful outcome.

Mr. Liu Zhicheng took the initiative to step forward and pulled the China Merchants Bank, which was on the verge of collapse, back to safety.

The Hong Kong government also played an active role, promising that if Mr. Liu Zhicheng handled the China Merchants Bank well, he would have the right of first refusal to purchase Overseas Trust Bank (the price was privately negotiated).

Depositors of the Guoshang Bank signed a "no bank run" commitment to cooperate with Mr. Liu Zhicheng in taking over the Guoshang Bank.

For a time, all three parties received praise from society!

This is something the Hong Kong government did not expect!

Originally, the Hong Kong government was heavily criticized in this incident; it was even accused of "changing its policies every day."

Because in the first half of this year, the Hong Kong government first collected 200% tobacco tax, and then quickly changed it to 100% tobacco tax.

The Hong Kong government has also been repeatedly indecisive on issues such as taxi fuel fees and the Banking Association's interest rate hike and then reduction, which has caused criticism.

Now that public opinion has suddenly changed, the Hong Kong government has suddenly received good reviews, which was something that no Hong Kong government official had expected.

However, some people also understand that Liu Zhicheng may have contributed behind the scenes. Although Hong Kong advocates press freedom, Liu Zhicheng cannot have had no influence on public opinion.

The Guoshang incident is proceeding in an orderly manner, and Liu Zhicheng's advisory team is helping him deal with it.

The main purpose is to review the detailed information of Guoshang Bank’s debts, assets, deposits, etc.

The formal contract has not yet been signed with the Hong Kong government, and both parties have agreed to sign a formal contract in mid-June.

Once the contract is signed, the 32 branches of China Merchants Bank can start operations immediately.

The original employees of China Merchants Bank will also return to their posts, and as for the senior management, most of them will be replaced by Liu Zhicheng's team.

(End of this chapter)