Chapter 570: Widespread Harvest
The fallout from the crises at Henglong Bank and Jiahua Bank has had an unparalleled impact on other banks.
Particularly, families like the Lis from East Asia Bank, the Wus from Yonglong Bank, and the Mas, Liaos, and Qiuls from Dasheng Bank have all immediately mobilized to investigate the situation. Their banks are of similar strength to Henglong and Jiahua, and they fear their own institutions might follow the same path.
At such a critical time, it is essential to be fully alert to ensure the stability of their banks.
There are many smart people in Hong Kong. Even those who are not part of the banking families or bigwigs are paying attention to the situation at Henglong and Jiahua banks.
At the headquarters of Global Shipping Group, Bao Yugang and his son-in-law Wu Guangzheng are discussing the current situation over the newspaper.
Seeing a strange smile on his father-in-law's face, Wu Guangzheng asks, "Dad, have you discovered something?"
Bao Yugang smiles but does not answer. Instead, he asks, "Given the current situation, do you have any thoughts?"
Wu Guangzheng ponders for a moment and says, "If it were just one bank having issues, it might be seen as a coincidence. But when two banks experience problems at the same time, especially related to the misuse of funds in gold futures, it seems like someone is definitely behind this."
"And the way public opinion has surged so quickly doesn't resemble a normal process of media coverage."
"But who is behind this, and what is their motive, I can't figure out."
Bao Yugang smiles faintly, clearly satisfied, and says, "You're right. Someone is definitely manipulating this. I'm sure many people in Hong Kong have realized this."
"First, it's a thunderous impact. Henglong Bank and Jiahua Bank are in a dire situation unless banks like HSBC, Standard Chartered, Bank of China, or Hang Seng Bank step in with substantial funds to help them through."
"But the crisis happened too quickly. Apart from the Zhuang and Liu brothers, no one knows the true state of Henglong and Jiahua banks. With the instigators still unknown, even those who might want to step in are hesitating."
"But as the situation unfolds, it will become clearer. When opportunities arise, someone will eventually make a move."
"The key is whether the two banks will still have value worth targeting by then, and whether it's worth offending those who have acted now."
Wu Guangzheng nods in understanding and, seeing the knowing smile on his father-in-law's face, asks, "So, Dad, do you know who is behind this?"
Bao Yugang gazes into the distance with a knowing smile, his mind drifting to a familiar figure. He replies, "It's not certain yet, but I have a guess. We'll see. If it's him, the results will likely be apparent soon."
Wu Guangzheng is taken aback and, seeing his father-in-law's reluctance to elaborate, refrains from asking further.
Although Bao Yugang says this, he is basically certain that it is Xia Yu behind the crisis.
After all, both Henglong and Jiahua banks have suffered losses related to gold futures. The prominence of "gold futures" immediately brings Xia Yu to Bao Yugang's mind.
Xia Yu still holds Bao Yugang's 220 million USD, which is invested in gold futures.
Considering who in Hong Kong has such keen business acumen, substantial capital, and a motive to manipulate these two major banks, Bao Yugang believes it must be Xia Yu.
The current trend in public opinion does seem like something Xia Yu would orchestrate. Few others could achieve this, although there are other possibilities.
However, Bao Yugang knows Xia Yu well, and he is 80% sure that Xia Yu is behind this.
Since the Zhuang and Liu brothers haven't approached him for a loan yet, Bao Yugang has already decided that even if they do, he will not lend a single cent to avoid potentially disrupting Xia Yu's plans.
---
On this day, the Zhuang and Liu brothers face numerous obstacles. No one dares to lend them money, and no one is willing to provide any funds.
Given the critical situation and the large amounts involved, even if large banks want to help Henglong and Jiahua, they need to fully understand the situation before deciding how much to lend. Investigating the situation, even if the Zhuang and Liu brothers open their bank accounts for review, will take considerable time.
"Akung, how did it go?" Zhuang Qingquan asks anxiously as he sees Zhuang Rongkun return with a gloomy expression.
Unable to secure any loans, the brothers turn their focus to recovering their own loans. Even if they have to pay penalties and forgo interest, they need to get back their funds to handle the current crisis.
Zhuang Rongkun's target is Jiuding Real Estate Group, which had borrowed 500 million HKD months ago.
It was because of the loan to Jiuding Real Estate that Zhuang Rongkun had to borrow from other banks and deplete Henglong Bank's liquidity. They then temporarily misused these funds when large clients bought gold futures.
But what's done is done. Zhuang Rongkun himself decided to issue the loan, and it's not Jiuding Real Estate Group's fault.
Now, in the midst of the crisis, Zhuang Rongkun wants to recover the 500 million HKD lent to Jiuding. If he can retrieve this amount, he could quickly quell the panic.
Recovering loans from other companies is more difficult: not only is the amount insufficient, but it is also very time-consuming.
Seeing Zhuang Rongkun's expression, it seems he returned empty-handed.
Zhuang Rongkun sits down, pours himself a cup of tea, and drinks it quickly before slamming the cup on the table.
"Liu Shihao refuses to repay the loan now. Our loan hasn't depreciated, and Jiuding Real Estate Group hasn't breached the contract. We have no right to forcibly recover the loan."
"I tried everything, even asking him to repay 480 million HKD, but he won't agree."
Zhuang Rongkun is furious, feeling frustrated that this crucial lifeline has been blocked.
"Big Brother, how much money does the bank still have?" Zhuang Rongkun asks his brother.
Zhuang Qingquan immediately responds, "I just inquired, and there's about 32 million HKD left. Now, it's probably down by another million."
"That's with me instructing all staff to intentionally slow down. Otherwise, the 70 million HKD in funds definitely wouldn't last until tomorrow morning."
"However, the situation still looks precarious!"
Zhuang Qingquan's face darkens as he speaks.
Zhuang Rongkun falls silent. He hasn't slept well the previous night and didn't sleep at all during the day. His eyes are bloodshot, his mind is in chaos, and he is overwhelmed with a mix of emotions—anger, confusion, helplessness, and more.
Feeling frustrated, Zhuang Rongkun picks up a cup from the table and throws it forcefully to the ground.
"Bang!"
Zhuang Rongkun's sudden action startles Zhuang Qingquan, who sighs and falls silent upon seeing his brother's state.
"Akung, it seems we are doomed."
After a long time, Zhuang Qingquan says softly.
"I'm not willing to accept this!" Zhuang Rongkun growls, clenching his fists with veins bulging. Having come to Hong Kong from the Philippines and seeing Henglong Bank's successful development over the past three years, he now faces bankruptcy, and he cannot accept it.
Zhuang Qingquan shakes his head and sighs, offering consolation, "Being unwilling is pointless. Over the decades, we've encountered many frustrations, and we've come through. But we must not give up until the last moment. If the family's business is to be preserved, we need to keep trying to borrow money and recover loans. If someone wants to buy the bank at a low price, sell it. If there's still no money in the end, then shut down and declare bankruptcy."
Zhuang Rongkun angrily responds, "Who will lend us money now? Everyone is too shrewd. As for recovering loans, no company will exchange loans with us in this crisis. They probably wish for our bankruptcy so they can either seize the money or use it without paying—bunch of bastards!"
"Let's keep dragging it out. If it really comes to it, we'll have to declare bankruptcy."
"Heh, I'm sure someone is waiting for us to go bankrupt so they can come and take their share."
---
As they say, misfortunes never come singly. That afternoon, Jiahua Bank is the first to run out of funds and announces a halt to withdrawals. Users waiting to withdraw their money are incensed, causing chaos at Jiahua Bank's headquarters and branches. In the uproar, some people act out, but fortunately, the Hong Kong police were prepared and maintain order.
When Jiahua Bank announces the halt to withdrawals, Henglong Bank's depositors are provoked into a frenzy, rushing to withdraw their funds. Depositors who had already been frustrated with slow service now openly berate the staff, causing the counter personnel to speed up under pressure.
By around 5 PM, Henglong Bank also depletes its funds and announces a halt to withdrawals, leading to a similar uproar among depositors who haven't yet withdrawn their money.
The Hong Kong government has been monitoring the situation but did not expect it to escalate so quickly. In one day, both Jiahua and Henglong Banks had to stop withdrawals.
Many depositors who couldn't access their funds gather outside the government offices, demanding intervention to get their
hard-earned money back.
In response, Chief Executive Mike Leung immediately convenes a meeting and appoints the Financial Secretary, Xia Dingji, to lead an investigation into Henglong and Jiahua Banks.
At this moment, the entire Hong Kong, from ordinary citizens to bigwigs, focuses their attention on this issue.
Of course, smaller banks are also struggling, as the sudden crisis at Henglong and Jiahua Banks has drastically reduced public confidence in banks. Many depositors, holding their passbooks, rush to withdraw funds, causing several small banks to fall below their liquidity safety thresholds, putting pressure on bank presidents and major shareholders.
Many small banks, facing insufficient liquidity, scramble to secretly raise funds.
Although all are banks, their strengths differ, and their responses to the crisis vary.
For instance, HSBC and Standard Chartered quickly seize the opportunity to attract deposits, aiming to pull customers away from smaller banks.
Jiuding Bank is no exception. Liu Tianzi directly appears on Global Television and invites numerous authoritative third-party representatives to testify, revealing some of its data, such as a cash flow exceeding 1 billion.
Taking this opportunity, Liu Tianzi loudly proclaims Jiuding Bank as Hong Kong's bank with the highest interest rates and the greatest safety, making every effort to attract deposits and extending business hours until 10 PM.
Despite several large banks competing for customers, Jiuding Bank's exposure of its 10 billion cash flow significantly boosts its reputation, with some citizens heading straight to Jiuding Bank to deposit their money.
Of course, people also flock to HSBC and Standard Chartered.
Xia Yu is aware of the situation and is unconcerned. Although Henglong and Jiahua Banks are suffering the most, other small and medium banks are also affected. In this excellent opportunity, HSBC, Standard Chartered, and Jiuding Bank, including Xia Yu's own bank, all take advantage of the situation to reap the benefits.
The speed of the run on the banks is rapid. Historically, Henglong Bank was once severely impacted by a rumor from the Xie Li Yuan Gold Shop, and within two days, over 100 million was withdrawn. Now that Henglong Bank itself is in trouble, the impact is even greater.