September 18th—the run on Longheng Bank had been going on for three days!
Over those three days, the business world of Hong Kong Island had been in a state of constant upheaval, with undercurrents of turmoil.
As newspapers and magazines continued to publish negative reports about Longheng Bank, the bank found itself thrust into the eye of the storm, with large numbers of depositors flooding into the bank to demand their deposits.
For the first couple of days, the bank’s response was relatively calm: on one hand, it used available funds to honor customer withdrawals, while on the other, it actively sought to raise capital.
At the same time, Charles, the bank’s chairman, personally stepped forward to assure customers that the bank was fully capable of honoring all their deposits.
But his words were spoken too soon, and reality quickly set in!
By the third day as the situation escalated, the bank’s own reserves plus the 420 million Hong Kong dollars it had raised were completely drained by frantic customers.
Seeing this, other banks immediately tightened their cash controls and stopped lending to Longheng Bank to keep it afloat.
Before long, the once-mighty Longheng Bank found itself unable to pay out a single penny and was forced to announce a suspension of customer withdrawals.
The news that Longheng Bank had run out of money hit like a depth charge, leaving everyone on Hong Kong Island in a state of shock.
In an instant, ordinary citizens with deposits at Longheng Bank flocked to the bank’s headquarters to protest and cause a commotion; at its peak, the crowd swelled to over 20,000 people.
As a result, several streets near the bank’s headquarters were completely gridlocked.
Even when the British Hong Kong government deployed large numbers of military and police to maintain order, it was to no avail.
What was even more unexpected was that this was only the beginning!
After the news broke that Longheng Bank was facing a run on its deposits and was unable to pay out customer funds, it wasn’t just Longheng Bank that suffered.
A host of small and medium-sized banks, including Sun Hung Kai Bank, K Wah Bank, Wing On Bank, Union Bank, and Kang Nian Bank, were also caught up in the turmoil, experiencing capital flight and even bank runs.
The Longheng Bank incident seemed to be merely a signal, opening a Pandora’s box!
It was inevitable: Longheng Bank’s suspension of payments to depositors severely shook the confidence of the public and investors in the local banking sector.
It’s important to note that Longheng Bank is not some small, weak institution. As the sixth-largest bank on Hong Kong Island, it has long enjoyed the trust of the general public.
Who would have thought that such a major bank, with dozens of branches and thousands of employees, could suddenly run out of money?
This inevitably reminded the people of Hong Kong Island of the banking crisis from over a decade ago. At that time, the crisis primarily targeted Chinese-owned banks; within a very short period, nearly all of them faced a run on their deposits.
Soon, these banks—whether due to insolvency or other reasons—either went bankrupt or were absorbed by major banks controlled by British-owned conglomerates.
Who would have thought that, just over a decade later, the same scenario would play out again!
Faced with this sudden turmoil, the British Hong Kong government was taken aback.
They had assumed this was merely an internal financial dispute between the Lai family and Longheng Bank. Although Longheng Bank had a deficit of over a billion dollars to cover, with the Lai family—a cash cow worth tens of billions—on their side, they had nothing to fear.
Consequently, both the British Hong Kong government and the Governor’s Office believed everything was under their control.
In fact, several major powers—including Jardine Matheson—were already sharpening their knives. They intended to use this crisis to acquire all of Longheng Bank’s shares, turning the bank into a sharp scythe for British-owned conglomerates to harvest Hong Kong’s economy.
But what they never could have imagined was that the people of Hong Kong Island, like startled birds, panicked and rushed to withdraw their life savings from small banks.
Such a massive wave of withdrawals plunged more than a dozen small and medium-sized banks into financial crisis, with some—already struggling—now teetering on the brink of collapse.
If a single bank goes bankrupt, that is a normal business occurrence—nothing to fear—and the impact is limited.
But if five, ten, or even more banks were to go bankrupt, that would no longer be a minor matter—it would be a financial crisis!
The impact on the regional financial sector would be nothing short of catastrophic.
One misstep could result in massive losses for all parties involved!
Left with no other choice, the British Hong Kong government had to step in personally to reassure the public.
At the same time, it mobilized massive amounts of foreign exchange to take over the severely troubled banks.
This left the Governor’s Office and the entire British-owned financial group with a strong sense of having shot themselves in the foot—a deeply unsettling feeling!
……….
Genting No. 1!
The chaos outside didn’t affect Li Yi. While the British Hong Kong government was too busy dealing with its own problems, he stayed put in his luxurious villa, never setting foot outside.
It wasn’t that Li Yi had nothing better to do; it was simply that things were too chaotic outside right now, and he didn’t dare to go out!
That’s right—he simply didn’t dare!
After all, this was Hong Kong Island, and many members of the city’s elite families knew full well that the chaos unfolding outside was directly linked to him, Li Yi.
Moreover, this chaos had not only affected British-owned conglomerates but also involved numerous triad organizations.
Under such circumstances, it was inevitable that some desperate individuals would take a desperate gamble and try to take him out.
So, until the situation was resolved, Li Yi planned to hole up in the Cloud Peak Villa District and not go out.
After all, the security at the Cloudtop Villa District was formidable, and with the formidable strength of Zhang Ziqiang and his men, even if someone really wanted to take him out, they wouldn’t be able to break in here—unless they mobilized an army.
In his study, Li Yi was analyzing the situation when suddenly a series of sharp knocks sounded at the door.
“Come in!”
As the door swung open, Li Yi saw Zhang Ziqiang stride in and say, “Chairman Li is here. He says he has urgent business with you!”
“Show him in!”
“Yes, sir!”
Soon, Li Futiao walked in from outside, accompanied by his son Li Yunbao and his assistant Zhou Xinghua.
Seeing this, Li Yi immediately stood up and said, “Old Li, what brings you here?”
Li Fuzhao skipped the pleasantries and got straight to the point: “Li Jiuying has backed down and is seeking reconciliation!”
“Oh, is that reliable?”
“He called me personally. He’s already taken Ma Biao and several of his key lieutenants into custody, and he said he’s ready to hand them over to us at any time!” Li Futiao said.
“Looks like this guy really has been backed into a corner!” Li Yi said indifferently.
“It seems so. My people also discovered that Li Jiuying sent his wife, children, and the rest of his family away yesterday. Now, he’s the only one left on Hong Kong Island!” Li Futiao said.
“He’s certainly decisive, though his judgment leaves something to be desired!”
“Brother Li Yi, what should we do now? Should we accept his offer of surrender?” Li Futiao asked immediately.
“Accept it. Why wouldn’t we?”
Li Jiuying is currently isolated and surrounded on all sides. Accepting his plea for peace at this moment would not only prevent him from going down in a desperate last stand against them, but also allow them to use him as a pawn to eliminate their enemies and divert the trouble elsewhere—it’s a win-win situation!
“Then shall I have him send the men over to us?”
“Ma Biao?”
“Right!”
“No need. Just let Li handle it himself. He should know what to do!” Li Yi said.
In Li Yi’s eyes, Ma Biao was nothing more than a lowly lackey unworthy of mention. He had never taken him seriously from the start and certainly wouldn’t dirty his own hands over him.
Besides, with Li Jiuying already serving as a ready-made pawn, why would he want to get entangled in this mess?
“Alright, I’ll contact him right away!”
“Wait!”
Li Yi continued, “Old Li, tell that Li fellow that if he wants us to let the past go, besides dealing with Ma Biao, he needs to hand over his shares in Longheng Bank and sell off all his real estate projects at a discount!”
“Brother Li Yi, what exactly do you mean by ‘at a low price’?”
“The Longheng Bank shares plus all the real estate projects—a total of 1 billion Hong Kong dollars!”
As soon as he said this, the study fell deathly silent; everyone was stunned by Li Yi’s words.