Reborn in 1970, I thrived in Hong Kong.

Due to Li Huai-ren's meticulous and almost demanding requirements for filming, the filming progress of the movie "The Big Boss" was very slow.

On August 14, 1971, Li Huai-ren finally received good news. Ho Sin-hang, chairman of Hang Seng Bank, called and agreed to convert the HK$61 million that Li Huai-ren had lent to Hang Seng Bank into 61% equity, thus completing the debt-to-equity swap agreement reached earlier by both parties.

Let's go back to June of this year.

In mid-June, Hang Seng Bank faced a crisis and was on the verge of collapse.

The trigger was a triple fatal blow.

First, the Hong Kong stock market crashed, with the Hang Seng Index plummeting by 75% in 1971 (from 1770 points to 406 points), and the Hang Seng Bank's mortgage loan default rate soaring to 28%.

Secondly, liquidity dried up, foreign banks withdrew Hong Kong dollars, the market's funding chain broke, and the Hang Seng loan-to-deposit ratio reached as high as 94% (the regulatory red line is 70%).

Third, a bank run occurred. On June 12, 1971, rumors circulated that Hang Seng Investment's "Caring Properties" had suffered huge losses (which was later proven false), triggering a panic run on the bank.

Within 72 hours, depositors withdrew HK$1.5 million (33% of total deposits), leaving the branch cash-strapped. Most strangely, the vast majority of those who withdrew cash had opened accounts at Hang Seng Bank just one to two months prior.

In a previous life, after the Hang Seng Bank crisis broke out, on the night of June 14, Hang Seng Chairman Ho Sin-hang urgently sought a meeting with HSBC Chairman John Saunders, frankly stating that "without assistance, we will go bankrupt tomorrow."

On the morning of June 15, HSBC's risk control team entered Hang Seng Bank to audit its accounts and found that Hang Seng Bank's core corporate loan quality was good; real estate bad debts were only 8% (lower than the market); the fatal flaw was the lack of liquidity.

On the afternoon of June 16, HSBC proposed to acquire 51% of the shares. Ho Sin-hang accepted with tears in his eyes, but insisted on three conditions: first, retain the Hang Seng brand; second, the management team should remain in their positions; and third, independent operation rights.

On the afternoon of June 17, both parties signed an agreement:

HSBC acquired a 51% stake in Hang Seng Bank for HK$5100 million in cash (HK$61 per share, a premium of 18%).

However, in this life, with the addition of Li Huai-ren, a reborn individual who covets Hang Seng Bank, HSBC naturally cannot "get what it wants" as it did in its previous life.

In Li Huai-ren's grand strategic layout of industry, commerce, and finance, there are two most important platforms: one is Phoenix Plaza, the product sales terminal; the other is the bank.

Both platforms are indispensable; only with the successful completion of all of Li Huai-ren's plans around these two platforms can the expected goals be achieved.

Therefore, after creating Phoenix Plaza, Li Huai-ren kept a close eye on Hang Seng Bank, which was "acquired" by HSBC in 1971.

Why are quotation marks used for "acquisition"?

First, the timing of the Hang Seng Bank crisis was too coincidental; second, it was later confirmed that the majority of those who withdrew HK$1.5 million in cash were HSBC customers and suppliers of British-owned companies; and third, the acquisition of Hang Seng marked the end of the golden age of Chinese-owned banks in Hong Kong under British rule, forcing banks such as Bank of East Asia and Wing Lung Bank to turn to the Southeast Asian market.

On June 12, when rumors circulated that Hang Seng Investment's "Caring Properties" had suffered huge losses, triggering a panic run on the company, Li Huai-ren immediately found his fourth uncle, Li Zhao-ji, and had a private conversation with him for two hours.

That evening, Li Zhaoji personally visited He Shanheng and had a private conversation with him for more than an hour before leaving.

On June 14, when faced with the choice between seeking HSBC's assistance or asking Li Huai-ren for help, Ho Sin-hang, who already knew that HSBC was behind the Hang Seng Bank crisis, and the other shareholders of the bank naturally chose Li Huai-ren, who was unfamiliar with the banking industry.

On June 15, Li Huai-ren signed an agreement with Ho Sin-hang and other shareholders of Hang Seng Bank, under which Li Huai-ren would lend HK$61 million to Hang Seng Bank. If Hang Seng Bank failed to repay the loan on time within two months, the debt would be converted into equity, and Li Huai-ren would acquire 61% of Hang Seng Bank's shares.

In the previous life, on the day HSBC signed the agreement, it injected HK$8000 million in liquidity into Hang Seng Bank, completely averting a run on the bank.

In this life, Li Huai-ren wanted 100% control of Hang Seng Bank, which was not yet listed, so naturally he did not inject any additional cash liquidity into Hang Seng Bank.

As a result, Hong Kong citizens all know that Li Huai-ren lent HK$6100 million to Hang Seng Bank. Although the number of bank runs has decreased significantly, the most critical issue for the past two months is that Hang Seng Bank has seen money flowing out but not coming in.

What do banks do? It doesn't need to be so complicated.

You can think of it as renting out umbrellas. On a sunny day, even if you don't need an umbrella, they will try their best to lend it to you. However, as soon as the sky gets a little cloudy and it hasn't rained yet, the bank will immediately take back the umbrellas that have been lent out, euphemistically calling it "risk control".

As for whether you live or die after you take back your umbrella and get soaked in the rain, that's none of their business.

In short, while the analogy may not be entirely accurate, this is roughly how banks are.

Hang Seng Bank is currently in a predicament where it has lent out money (umbrellas) but cannot get it back. Moreover, customers are not only not keeping the money (umbrellas) they deposited in the bank, but also want to take it back.

Therefore, Hang Seng Bank is not only unable to repay Li Huai-ren the HK$61 million, but the HK$6100 million has also been withdrawn by depositors. It can only be converted into equity according to the original agreement, with Li Huai-ren holding 6100% of the shares.

At 2:30 p.m. on August 14, Li Huai-ren, accompanied by his brother-in-law Luo Jia-zhuang, arrived at the conference room on the second floor of Hang Seng Bank.

"Good afternoon, Mr. Li and Mr. Luo!"

"Good afternoon, Mr. He, Mr. Lin, and Mr. Li!"

After exchanging greetings and pleasantries, the two sides immediately got down to business and began processing all the formalities for the debt-to-equity swap.

Luo Jiazhuang checked the documents several times and, seeing no problems, immediately nodded to Li Huai Ren, indicating that he could sign the documents directly.

Looking at Li Huai-ren signing the document, Luo Jiazhuang was filled with emotion. Just over a year ago, he had thought that he would have to "clean up" his brother-in-law's messes every day and help him deal with his ridiculous affairs.

Unexpectedly, in the past year or so, my brother-in-law seems to have become a completely different person. Not only has he become more sensible, but he has also become very successful, becoming a tycoon with a wealthier fortune than my fourth uncle, Li Zhaoji. Now he even directly controls Hang Seng Bank. It's like he's been given a cheat code, isn't it?

Just as Luo Jiazhuang was filled with emotion, Li Huai-ren had already signed all the documents, and the 61% stake in Hang Seng Bank that he had dreamed of was finally in his hands.

Li Huai-ren gently placed the pen on the table, glanced at He Shan-heng and the other minority shareholders, and said:

"Dear shareholders, on my way here I did some calculations. To completely resolve the Hang Seng Bank crisis, at least HK$8000 million in liquidity must be injected."

I propose that everyone share the HK$8000 million according to their respective shareholdings.

After speaking, he took out a cash check for HK$4880 million from the Hong Kong branch of the Bank of China from his briefcase and gently pushed it in front of He Shanheng and the others:

"This is HK$4880 million, which is my share."

He Shanheng and the other minority shareholders looked at each other in bewilderment.

How could they possibly have the money now? Not only could they not, but they had also pledged almost all of their shares to Hang Seng Bank to borrow money to invest in other projects.

This requires a brief explanation of the investment methods and habits of Hong Kong people during this period.

These days, even in the 21st century, Hong Kong people love playing the game of making money from money.

Simply put, it means mortgaging one's own assets to obtain a loan for reinvestment, such as mortgaging stocks or real estate to a bank to obtain cash to invest in projects that the bank is interested in, as long as they can repay the loan interest on time.

That's how He Shanheng and his group play.

Now, due to the crisis at Hang Seng Bank, the value of the shares they pledged to Hang Seng Bank has naturally shrunk significantly, and the projects they invested in are not something they can withdraw their investment from at will.

However, what Li Huai-ren said is true: if Hang Seng Bank is not injected with liquidity, it will definitely go bankrupt soon.

Li Huai-ren, of course, already knew that He Shan-heng and the others couldn't come up with the money corresponding to their shareholding ratio. He smiled and said:

"I have a suggestion, just to be clear, it's just a suggestion."

Why don't you sell me all the remaining Hang Seng Bank shares you have?