Siheyuan, Shazhu: I have both parents in this life

Chapter 254 The Big Players Fall, Capital Suffers Setback

As the Hang Seng Index continued its downward trend, Xiaoman's financial team became increasingly busy, even hiring more staff.

They precisely targeted Wheelock and Swire, among others, and continued to reap profits amidst the chaos, accumulating ever-growing ammunition reserves.

Soon after, Ah Lang, holding the proof that Yellow River Industrial had become the largest single shareholder of Jardine Land, strode confidently into the board of directors of Jardine Land.

When he announced: "Effective immediately, Yellow River Industry will exercise its shareholder rights."

Jardine Matheson panicked. Real estate was still Jardine Matheson's most profitable business in Hong Kong.

When the news reached London, Jardine Matheson's true owner, Old Keswick, could no longer sit still.

He flew to Hong Kong in person and, through HSBC tycoon Sir Michael Sandberg, requested a meeting with Ho Yu-chu.

The atmosphere was somber in a high-level meeting room at HSBC.

Old Keswick, leaning on his cane, looked weary, yet managed to maintain his former dignity.

Shen Bi accompanied him, his expression complex.

He Yuzhu arrived on time with A Lang.

“Mr. Ho,” old Keswick said bluntly, “Jardine Matheson is willing to pay the price and implores Your Excellency… to be lenient. We hope to redeem some of our core assets, especially our stake in Hongkong Land.”

He Yuzhu picked up his teacup, his gaze calm: "Sir Keswick, the business world is like a battlefield, where only the victors are remembered. When Jardine Matheson started this conflict, did you ever consider showing mercy?"

Old Keswick's Adam's apple bobbed: "Times have changed. The Grosvenor affair was not my intention; it was out of necessity. Jardine Matheson is willing to offer above market price..."

He Yuzhu raised his hand to interrupt: "Market price?"

He looked at Ah Lang. Ah Lang understood and recited a series of numbers, which were precisely the current dismal stock price of Jardine Land.

“At this price, Huanghe can continue to increase its holdings,” He Yuzhu said.

Old Keswick's face was ashen, and his hand holding the cane trembled slightly.

Shen Bi coughed lightly, trying to ease the tension: "Mr. He, it's better to resolve conflicts than to let them fester. Sir Keswick's personal visit shows his sincerity. If a reconciliation can be reached, it will also be beneficial to stabilizing the market."

He Yuzhu put down his teacup and looked at old Keswick: "If you want to talk, we can. Three things: First, all of Jardine Matheson's dock businesses, including the remaining interests, will be sold as a package to Wharf Holdings. Second, Yellow River Industrial has the right of first refusal for Jardine Matheson's real estate projects in Hong Kong, and we will assess the price. Third," he paused, "Jardine Matheson will completely withdraw from Kwai Chung and promise never to get involved in Hong Kong's port again."

The conditions were extremely harsh, almost to the point of dismantling Jardine Matheson's foundation in Hong Kong.

Old Keswick's chest heaved, and he remained silent for a long time. Finally, as if he had aged ten years in an instant, he said dejectedly, "I need time... to consider."

He Yuzhu stood up: "I await good news."

He left with Ah Lang, leaving the private room in a deathly silence.

Looking out the window at Victoria Harbour, old Keswick felt for the first time that the glory of Jardine Matheson was irrevocably extinguished on this land.

Old Keswick's "consideration" did not last long.

Jardine Matheson held five consecutive board meetings, but still couldn't find a solution in Hong Kong. The board members unanimously agreed that Jardine Matheson's way out was all over the world, except for Hong Kong.

A week later, a formal letter from Jardine Matheson headquarters landed on He Yuzhu's desk.

The letter was formal and restrained in its wording, but its core content was crystal clear: Jardine Matheson was willing to sell all of its core businesses and assets in Hong Kong, including the remaining equity in Jardine Land, its unsold properties, Dairy Farm International (Maxim's, Mannings, 7-Eleven), the remaining assets of Jardine Shipping, and all scattered interests not included in the previous asset package.

But the price was an astonishing astronomical figure—HK$1.5 billion.

"1.5 billion?" Ah Lang sneered as he looked at the documents He Yuzhu handed him. "The bosses are really daring. This old fox wants to take a big bite before he leaves. Dream on! The market panic hasn't subsided yet. If you pack up all his assets, they'll be worth at least 500 or 600 million at the current market price!"

He Yuzhu remained calm, his fingertips lightly tapping the table: "This is their last act of defiance, and also a test of our bottom line. They want to leave a respectable price for the end of this century-old colonial business."

He picked up a pen, quickly wrote a few lines in the blank space of the document, and then handed it to A Lang: "Reply to them. Two options."

Option 1: Package price of HK$350 million, paid in cash in one lump sum.

Option 2: Maintain the original price of 1.5 billion yuan. Yellow River Industry will abandon the overall acquisition, but will accelerate its actions in the stock market and other areas.

Finally, there is a small note: "Option 1 is the final offer and is non-negotiable. Valid for ten days. After that period, Option 2 will be implemented."

"Boss, this...this is 20 million cheaper than when we bought the HSBC asset package before!" Ah Lang exclaimed in surprise. This was truly a "deep discount".

“Times have changed.” He Yuzhu’s eyes sharpened. “Back then, HSBC was eager to unload its shares and cut its losses, while Jardine Matheson still had illusions. Now, Jardine Matheson is begging to sell, its illusions shattered, and the market is even worse. Option one is to give them a relatively dignified and quick exit, take the money and leave, completely free. Option two is to tell them that if they drag this out, they won’t even get this ‘rock-bottom price.’ The stock market is changing prices every day and keeps falling; if they drag this out any longer, their market value will only become even cheaper!”

"I understand! I will immediately have my legal team draft a formal response based on this."

Jardine Matheson headquarters, top floor office.

Old Keswick's hands trembled uncontrollably as he held the cold and cruel HK$3.5 million proposal.

That dream of 2.5 billion was as fragile as a piece of waste paper in the face of the other party's casual threat of "continuing to acquire through stock market transactions".

“Jazz…” the finance director’s voice was hoarse.

Old Keswick closed his eyes and took a deep breath. He had considered using official power, but it wasn't feasible. They were using legitimate means. If things continued like this, Jardine Matheson in Hong Kong would go bankrupt. At that point, it wouldn't be as simple as a rock-bottom price; they would be insolvent and they could just take it away with a little money.

He felt he couldn't bear the loss of a century-old enterprise.

When he opened his eyes again, all that remained in them was exhaustion and resignation; he looked as if he had aged ten years.

“Reply to Yellow River Industry…we…” His voice was hoarse, and each word was difficult to say, “…we accept Option One.”

In 1973, this financial and commercial war, which was ignited by a price war at the Kwai Chung Wharf and eventually swept through the entire British conglomerate and shook Hong Kong, ended in a complete victory for Yellow River Industries, which swallowed up Wharf Holdings, dismantled Jardine Matheson, and reaped huge cash flow.

The dust has settled.

Hong Kong's business landscape was rewritten a decade ahead of schedule.

A vast commercial empire centered around "Yellow River Industry" has risen proudly.

The news that Jardine Matheson reluctantly accepted a "rock-bottom price" to sell its core assets in Hong Kong was like pouring cold water into a boiling oil pan, instantly causing a stir throughout the Hong Kong business community.

The European and American capital circles, who had been observing from the sidelines, were in an uproar.

The swift and decisive actions and precise calculations displayed by Huanghe Industrial Group have instilled deep fear in them.

HSBC's Sir Michael Sandberg looked grim. This "stop-loss" deal eventually turned into the dismantling of Jardine Matheson. Although HSBC got cash, it also witnessed the collapse of an important client and its own influence was invisibly damaged.

Other British-owned companies, such as Swire and Wheelock, felt a sense of unease and tightened their defenses, fearing they might become the next target.

Those "elite Chinese" who relied on British capital and took pride in their foreign businesses were plunged into unprecedented fear.

The collapse of Jardine Matheson shattered the pyramid upon which they depended for survival.

The whispers at the party were no longer about London fashion, but about how to align themselves with the newly emerging Yellow River Industry.

Some people have already started racking their brains trying to get on board He Yuzhu's new big ship.

The banquet hall at the headquarters of Yellow River Industry was brightly lit.

Henry Fok and Li Huan arrived in person, their smiles genuine: "Mr. He, this battle was fought brilliantly! You've truly made us proud!"

He Yuzhu greeted him with a smile: "Mr. Huo, you flatter me. It was just a coincidence."

Li Huan exclaimed, "The century-old foundation of Yihe was actually dismantled by He Sheng in just a few months. His methods and ruthlessness are truly admirable."

He Yuzhu raised his glass: "In the future, I will need your continued support."

The atmosphere was harmonious; this was a genuine congratulatory visit.

As for those who weren't invited, they're incredibly jealous and are trying to mend their past grievances with the Yellow River, such as the likes of Bao Chuanwang and Li Ka-shing.

Of course, they also had other ulterior motives. Bao, the shipping magnate, set his sights on Jardine Matheson Shipping, while Li Ka-shing set his sights on Jardine Matheson Land Development and Kwai Chung, wanting to get a share of the pie.

While the Yellow River Industry headquarters was filled with clinking glasses and lively conversation, the top-floor conference room of Swire Group was filled with smoke.

Simon shed his gentlemanly facade, his fingertips digging into the map on the table: "Wharf Wharf is the heart! He Fei succeeded with underhanded tactics, his foundation is unstable. Let's join forces to buy up the outstanding shares and regain control!" His hawk-like gaze swept over Swire, the tycoon of Swire, and Wheelock, the chairman of Wheelock. "Grossner has plenty of cash ammunition. As long as you hold your ground, the share price can turn around!"

Shen Bi sat quietly in the corner, lowered his eyes and coughed lightly: "HSBC cannot directly enter the market, but its funding channels are open."

Swire stubbed out his cigar, his eyes flickering with uncertain emotions behind the grayish-white smoke.

Madden's knuckles turned white from clenching his fists—if Wharf Holdings loses its last remaining shares, Wheelock's docks and warehouses will be next.

The two men exchanged a silent glance. This move was too risky, but they were even more afraid that they were the Yellow River's next target.

One day in early July 1973.

Bai Yifeng's intelligence report was delivered to He Yuzhu's desk: "Boss, Grosvenor's joint account has started a buying spree at Wharf Holdings today, and British capital is following suit."

"Then let's release some bait, as long as we can keep our position as chairman of the board."

“Yes, the short positions in the futures market are in place, with triple leverage, waiting for the prey,” Xiaoman said from the side.

“Isn’t three times a lot too low? Grosvenor is still very wealthy,” He Yuzhu said.

"Brother Zhu, isn't adding more a bit risky?"

What is the current market index?

"It hovered around 480 points."

"Do you remember what I told you was the lowest possible price?"

"150."

"Then what are you worried about? You must have made quite a few gains during this time, sacrificing the small for the big, taking a big bite out of Grosvenor."

"Yes, I'll go back and revise the plan right away."

On the Yellow River side, they are nervously preparing their resources to ambush United Capital.

Grosvenor's offensive came much faster than He Yuzhu had anticipated.

In mid-July, Wharf Holdings' share price on the Hong Kong Stock Exchange seemed to receive a shot in the arm, jumping from HK$18 and breaking through HK$30 in just ten days.

Shares of Swire and Wheelock also rose, dragging the Hang Seng Index up from 480 points to 550 points. The market was in an uproar.

"British capital launches a major counterattack!" "Wharf Holdings is about to revive!" Street tabloids used the most exaggerated headlines to stir up public sentiment.

Retail investors rushed into brokerage firms clutching newspapers, while waiters at tea restaurants gathered around the radio during their lunch break to listen to stock market reports, their eyes filled with fervor.

Some people mortgaged their pre-sale apartments to cash out, while others staked all their savings, betting that this "west wind" could overwhelm the cold front from the east.

Li Ka-shing's Cheung Kong Holdings was not immune to this trend either.

Having acquired the North Point site at the beginning of the year with the intention of playing it safe, Wharf Holdings is now poised to break through the $40 mark, and with news of a joint effort by British giants to support it, it has finally lost its composure.

Through "Changjiang Real Estate," they secretly absorbed nearly 5% of the circulating shares, even resorting to short-term borrowing, hoping to catch this "break-even" express train.

“Boss, Grosvenor’s position has exceeded 20%, Swire and Wheelock have increased their holdings to a combined 15%, and the market’s follow-up buying accounts for nearly 30%.” Chen Sheng, who was temporarily transferred over, placed the latest holdings report in front of He Yuzhu and pointed at the data with his fingertips. “They used HSBC’s funding channels to leverage their positions, with a cost price of around HK$25.”

He Yuzhu looked at the steep K-line chart of Wharf Holdings on the projector: "I heard that quite a few retail investors and speculative capital have also entered the market?"

“Yes, brokerage data shows that new retail accounts have surged by 30% in the past two weeks, with many people borrowing money to enter the market. Li Ka-shing’s Cheung Kong Property Holdings also bought in 10 days ago, at a considerable cost,” A Lang added.

"They really have a knack for courting disaster. Do they really think British companies are a good fit?"

"Boss, I estimate that quite a few people will go bankrupt after this."

"Gambling kills!"

"Yes!"

At this moment, Xiaoman walked in carrying the futures market ledger, the reports filled with dense numbers: "Brother Zhu, as you planned, the scale of short selling through connections has reached 18% of the circulating shares, the leverage has been increased to five times, and the corresponding off-exchange hedging positions in the futures market are also in place. Coupled with the selling pressure from our own available positions, the firepower is enough to break through the defense. The Hang Seng Index is currently at 540, which is still a long way from that hellish price."

Chen Sheng added a key point: "The key targets have been locked in, and leverage is tight. They are running out of liquidity to maintain high levels."

He Yuzhu tapped his fingertips heavily on the table: "Wait a few more days, it won't be a problem to harvest more leeks, right?"

“No problem, the market is bullish right now, and it will likely rise even more,” Xiaoman said.

"Then let's wait until the market opens next Monday before making our move! Let them taste what it's like when leverage breaks." He Yuzhu's voice was calm, yet it carried an undeniable ruthlessness.

"Yes."

The Hong Kong Stock Exchange experienced its most frenzied day since the market opened the following morning.

Wharf Holdings' share price broke through HK$38, hitting a new high since the stock market crash.

Grosvenor's trader was riding high at the brokerage firm, even spreading the word: "Target HK$50, British capital is going to take back control of Wharf Holdings!"

Retail investors cheered in the streets, some holding up their stock certificates and spreading the news, and even the waiters in teahouses started "giving advice on the stock market".

In Li Ka-shing's office, he looked at Cheung Kong Property Holdings' holdings report, his brows furrowed slightly.

The deputy advised, "Boss, you can make a profit by selling now; the market is too crazy."

He shook his head: "British capital has the confidence to wait. Let's wait and see. It will at least reach HK$45."

The same thing happened for the next few days.

On Friday after the market closed, Chen Sheng knocked on He Yuzhu's office door: "Boss, Grosvenor's position has reached 28%, Swire and Wheelock combined have 20%, with a leverage ratio of 4. Retail investors hold 32%, and the circulating shares are less than 20%."

"That's enough." He Yuzhu stood up. "Notify Lingyi to take action on Monday."

"Yes, boss."

The Hong Kong Stock Exchange had just opened on Monday morning.

A sell order for 50 shares of Wharf Holdings suddenly appeared, causing the price to plummet by HK$35.

The market initially thought it was a normal correction, and retail investors were still buying the dip.

But then, sell orders came flooding in—100 million shares, 200 million shares… all market orders.

"What's going on?" Grosvenor's trader's expression changed drastically, and he quickly instructed HSBC to add funds to take over the position.

But the sell orders just wouldn't stop, and within half an hour, Wharf Holdings' share price fell below HK$30.

At the same time, the Hang Seng Index futures market experienced a major shock.

Xiaoman's team initiated a short position with five times leverage, which resonated with the selling pressure in the spot market.

"The British-funded funds have dried up!" someone shouted at the brokerage firm, and panic spread instantly.

Retail investors went crazy looking at the green numbers on the screen.

They rushed to the trading window, frantically trying to sell, only to be told there were no buyers at all.

The cries of retail investors echoed throughout Hong Kong. Some jumped off buildings, others fled with debts, and once bustling brokerage firms became deserted, leaving only discarded stock certificates scattered on the ground.

At Cheung Kong Holdings, Li Ka-shing's office phone kept ringing.

The market value of Wharf Holdings' shares held by Cheung Kong Property Holdings evaporated by 30% in half an hour, and the valuation of the land mortgaged to banks also fell, with banks calling one after another to demand the payment of margin.

"Sell! Sell now!" he roared into the phone, but the sell orders were overwhelming, and he could only cut his losses at HK$25. This one transaction alone cost him nearly HK$10 million, and his cash flow suddenly became strained.

In Grosvenor's makeshift conference room, Simon slammed his fist on the table and roared, "Where's HSBC's money? Take it over! Take it over now!"

But Sir Michael Sandberg's phone call was met with only a cold response: "The board has halted the funding channels; the risk is too great." The traders at Swire and Wheelock panicked. Their leveraged funds came from banks, and the falling share price triggered the margin call, prompting the banks to force the sale of shares.

Three days later, Wharf Holdings' share price fell below HK$20, a drop of more than half from its peak.

Grosvenor's 28% position suffered a floating loss of over HK$100 million, resulting in a margin call and forcing him to cut his losses and exit the market.

Swire and Wheelock fared even worse, not only failing to regain control but also losing nearly half a year's worth of profits.

On the top floor of the Swire Building, the ashtray in front of Swire was piled high with cigar butts.

As he looked at the stock market settlement statements being brought up below, his heart bled.

Grosvenor's promised "comeback" fell through, further exacerbating the already severely damaged Swire Group due to the stock market crash.

The cost of a direct confrontation with Yellow River Industry far exceeded expectations.

He then issued the order: "Stop all business expansion, shrink! Preserve your strength!"

Wheelock's Madden was in a real bind.

The failure of the Wharf Holdings takeover bid not only meant that the invested funds went down the drain, but also raised strong doubts in the market about Wheelock's own stability.

The share prices of his core assets, such as shipyards and warehouses, were impacted, and financing costs soared. He was forced to urgently fly to London to seek support from his parent company and banks, leaving him exhausted.

The luxurious office that Grosvenor Capital had temporarily rented was in complete disarray.

Simon Hopkins' eyes were bloodshot, his expensive suit was wrinkled, and he had lost all the composure of a London gentleman.

The elite trading team sent from headquarters now stood before him like a defeated rooster.

"Useless! All of you are useless!" Simon slammed the crystal ashtray off the table, sending shards flying.

"Mr. Hopkins, what should we do next?" someone asked.

Simon suddenly looked up and stared intently at the person who had spoken, who quickly lowered his head.

Simon took a few deep breaths, his voice hoarse, and said, "Pack your things, we're going back to London. Yellow River Industries... He Fei... Grosvenor will remember this grudge!"

Ironically, after they went downstairs and before they even got into their car, they suddenly heard someone nearby exclaim, "Someone jumped off the building!"

"Bang!" The car Simon was about to get into was hit squarely.

In the evening, a flight bound for London took off from Kai Tak Airport.

Simon Hopkins, with his remaining troops and huge losses, fled Hong Kong as quickly as possible.

In He Yuzhu's office, Xiaoman handed over the settlement report: "Brother Zhu, this battle has yielded a total net profit of 900 million. We still hold more than 25% of Wharf Holdings, and the board of directors is as stable as Mount Tai. Simon has gone back to London, Swire and Madden have suffered serious injuries, and Li Ka-shing is cutting off his arm to survive."

He Yuzhu took the report, but his gaze was fixed on something further away: "Well done. But the stage is not limited to Europe and North America. When the opportunity comes, you should go to a bigger place."

"Understood!" Xiaoman's eyes gleamed with excitement.

"You can't let your guard down; overseas investments can't stop."

"know."

After Xiaoman left, He Yuzhu picked up the phone and called He Yuxin: "Third brother, a sum of money will be deposited into the Wharf account soon for the upgrading of dock equipment."

He Yuxin's voice on the other end of the phone was filled with excitement: "Great, brother! It should have been changed a long time ago! Brother, should we follow the Kuiyong route?"

"Yes, Wharf's docks are too old and inefficient."

"Great."

The smoke of battle in Hong Kong's capital markets has not yet completely dissipated, but the top management of Yellow River Industrial has quietly shifted its focus from the chessboard of financial games to the more substantial and fundamental industrial sector.

He Yuzhu knew that a true business empire is built on real industries, not on stock codes.

Tseung Kwan O oil depot.

Xian Xingyao pointed to the second-phase construction site, where the foundation pouring had just been completed, and reported to He Yuzhu, who had come to inspect the site: "Boss, the foundations for the 10 crude oil tanks with a capacity of 5 cubic meters each and the supporting pipelines in the second phase have been laid. Based on the experience of the first phase, the tanks will be hoisted into place within three months. Together with the first phase, the total storage capacity will approach one million cubic meters. The deep-water berths have also been reserved as you requested for small oil tankers and shore-based refueling interfaces, and the drawings are being optimized."

He Yuzhu looked at the 10,000-ton tanker unloading oil at the berth; its massive oil boom resembled a steel blood vessel. "Safety is paramount. We need to double our investment in fire protection, lightning protection, and leak prevention redundancy. Also," he turned to Xian Xingyao, "how is the quality of the oil from the Middle East?"

"The impurities are high, and the sulfur content is large, but the price is indeed 30% cheaper. Our storage tanks and pipelines are made according to the standards you provided, so they are corrosion-resistant and there shouldn't be any major problems," Xian Xingyao replied.

"Okay. Once the second phase is completed, the storage capacity should be filled to more than 70% immediately. Go find Lingyi and ask her to support you in buying crude oil spot and forward contracts in US dollars, as much as you can get."

"Yes, boss."

(End of this chapter)