Chapter 438: Hang Seng Board Seats and Cinema Chain Expansion
Time quickly passed, and on March 1st, Hang Seng Bank held its first shareholder meeting following Yang Wendong's investment. At the meeting, it was decided that the board would consist of nine directors, and with Yang Wendong holding 28% of the shares on record, he would receive two board seats.
However, behind the scenes, with the shares he had quietly acquired, Yang Wendong's actual stake had already reached 32.3%, closing in on He Shanheng's 37.7%.
If he were willing to spend a little more, it was entirely possible for Yang Wendong to become the largest single shareholder. But now that the crisis had passed, buying up more shares would likely draw attention. There was no need to stir conflict with the He family; maintaining the status quo was enough for the time being.
It was important to remember that He Shanheng had controlled Hang Seng Bank for decades. Even in the original timeline, after HSBC acquired 51% of the shares, they still let the He family manage the bank. HSBC knew that forcibly taking control—even with all their experience—was risky. Moreover, the acquisition stirred resentment from many Chinese-owned companies, and if this same situation had occurred with Yang Wendong as the acquirer, the backlash would've been even more intense.
If Yang Wendong truly wanted control, it would be better to wait until Hang Seng went public and then increase his stake. As for operational control, that could be revisited when He Shanheng eventually retired.
In the original timeline, the He family didn't retain control of Hang Seng Bank. That might've been due to pressure from HSBC, but for now, letting He Shanheng continue to run things—with Yang Wendong's backing and some strategic resources—was the best way to maximize the bank's future potential. With the right support, Hang Seng could expand into Southeast Asia and even go global.
Two days later, the first board meeting was held. During the meeting, He Shanheng revealed the full financial damage of the recent bank run—39.57 million HKD lost, more than the previous year's net profit. Additionally, around 10% of depositors had withdrawn their money and not returned.
It was a heavy blow.
The board unanimously agreed that for the next one to two years, the bank must focus on risk control and adopt conservative strategies. It was better to earn less and stay liquid than to overextend. Some of the bank's high-risk debt holdings would also be systematically reduced.
After the meeting, He Shanheng invited Yang Wendong to lunch at a nearby restaurant.
"Mr. Yang," He said, pouring him tea personally, "I didn't get the chance to ask you during the board meeting. But now that it's just us—do you have any suggestions for Hang Seng's future development?
You mentioned overseas investment before. I looked into Singapore, and it does seem promising—but that's a long-term plan. In the short term, we still have to operate solidly here in Hong Kong."
There were many things you couldn't discuss at a formal board meeting. Once something was officially proposed, it had to be backed with data and subjected to a vote. Casual strategic talk was better saved for a private setting—even if the same board members were involved.
"In Hong Kong," Yang Wendong said, "my suggestion is that Hang Seng should reduce its real estate-backed loans and shift those funds into industrial lending. Especially electronics manufacturing—I'm quite optimistic about its future."
"You mean you think the real estate market will keep falling?" He Shanheng asked.
Yang Wendong nodded. "Yes. This is just the beginning. High prices were already a problem, and now with so many Chinese banks experiencing runs, credit will tighten across the board. That will hit real estate hard."
It wasn't just Hang Seng that faced a run—many other Chinese banks were in the same boat. Several smaller institutions had gone bankrupt, and the bigger ones were severely weakened.
Even though the government had stepped in, the damage was done. Fear had spread, and banks were reluctant to lend. The first industry to feel the pinch? Real estate.
And when property prices dipped, spooked banks started calling in loans or demanding more collateral. Developers were forced to sell assets to reduce their debt load, triggering steeper price drops. A vicious cycle that could only end in full-blown crisis.
"True," He Shanheng nodded. "Banking failures always hurt the property sector."
"Manufacturing needs capital too, but the difference is there's no leverage. And growth in manufacturing is driven by overseas demand," Yang Wendong added. "That's only going to get stronger."
"Haha, so your Changxing Industries and Rongyao Electronics are going to keep growing stronger," He Shanheng laughed. "But it's a pity. Now that you're a major shareholder, we can't actually work together."
"That's a shame indeed," Yang Wendong smiled. "But Hang Seng can still partner with my suppliers. They're sizeable businesses in their own right. And once we start investing in Singapore, there will be new opportunities to work together."
After the Liu Chong Hing incident in 1961, when the founder used bank deposits to fund his real estate empire, the government changed the rules. Banks could no longer lend to shareholders or entities they controlled.
It was a basic risk control measure found in many developed markets. The only reason Liu got away with it at the time was the government's previous inaction. Most other bankers saw the loophole but were too cautious to exploit it.
"Still, having your name attached to Hang Seng will help us grow," He Shanheng said with a smile.
Although the recent bank run had inflicted real damage, it hadn't touched the bank's core. And with Yang Wendong now involved, the future looked much brighter—especially when it came to overseas expansion. For that, someone with international business experience like Yang Wendong was essential.
Yang Wendong said, "I won't interfere in Hang Seng Bank's operations. I still trust Mr. He Shanheng's leadership. If there's ever a need, as long as it's reasonable, I'll support your decisions."
He had no intention of taking over Hang Seng immediately. First, because during this era, it wasn't common for Chinese businesses to merge with or acquire each other; and second, because finance wasn't his strength. If he got directly involved, it might actually jeopardize his other ventures.
In the short term, the costs would outweigh the benefits. Once his other industries were fully stabilized, then perhaps he would consider acquiring a bank of his own.
"Good. I won't let the investors down," He Shanheng said sincerely. After a pause, he asked, "Mr. Yang, do you think Hang Seng Bank should go public?"
"Not yet," Yang Wendong shook his head. "The economy is stagnant right now. Listing now wouldn't raise much capital. Better to wait. Give it two or three years, once Hang Seng has fully recovered—then go public."
"Perhaps I was too eager," He Shanheng admitted. "This bank run made me realize how important transparency is. If we had already gone public and our financials were open, it might've helped prevent the panic. Depositors are easily misled when they don't know the facts."
"Indeed. For banks, listing is usually the better option," Yang Wendong nodded.
Most major companies around the world were publicly listed. There was a reason for that. In time, when the benefits of being a time traveler began to taper off, Yang Wendong might also consider listing some of his enterprises.
Once listed, it was easier to bind stakeholders together—aligning interests and reducing risks. Private companies were vulnerable to government suppression. Public companies, with broad shareholder bases, enjoyed a degree of protection.
After parting with He Shanheng, Yang Wendong didn't return to the office. He went home instead. Most of his service-sector businesses in Hong Kong were scaling back during this period, while exports were running smoothly. As the boss, he finally had some leisure time.
When he arrived home, Bai Yushan was cradling their child. She looked up and asked, "Back from the Hang Seng board meeting already? That was fast."
"There wasn't much to discuss, so it ended quickly," Yang Wendong said with a smile. "Hang Seng was just wounded from the run. They're in a strategic retreat phase. Not much to plan at the moment."
In times of expansion, companies had a lot to coordinate. During contraction, the workload was lighter—there were still problems, but they required less frequent decision-making.
Besides, as a board member, Yang Wendong didn't get involved in day-to-day operations. He simply offered occasional guidance and kept a watchful eye.
He trusted He Shanheng. The man had built a bank from scratch strong enough to threaten HSBC. The core team was still in place, and with a bit of support and strategic direction, they would rebound.
Bai Yushan smiled. "I see. But aren't you worried this will offend HSBC? You told me before that many of Changxing's businesses still rely on them."
"If it offends them, so be it. It's not like we've come to blows—just some shadow boxing," Yang Wendong said nonchalantly. "And in business, interests come first. Even if I cross them today, we'll still work together tomorrow if it benefits us both."
People were pragmatic. In his past life, even Bao Yugang took over Wharf from Jardines, and two years later, the two sides were doing business together again.
In a small place like Hong Kong, once you reached a certain scale, you were bound to clash with other companies. If one conflict meant permanent enemies, then no one could do business.
Even countries weren't like that. One year they were at war, the next year they were allies again. Everything came down to interest.
"That's true," Bai Yushan nodded. "Still, we can't rely too heavily on HSBC. What if they retaliate?"
"Don't worry. This crisis gave me a chance to connect with Citibank," Yang Wendong said. "HSBC may be powerful in Hong Kong, but globally, they're not all that. My future lies overseas—I don't need to rely on them for everything."
In the early stages of his entrepreneurial journey, his markets had already been overseas. But back then, he had no access to foreign capital, which made him dependent on Hong Kong banks—especially HSBC, which acted as a quasi-central bank thanks to its massive foreign currency reserves.
But now that Changxing Group was bigger, cooperating with international banks was no longer a challenge. Even local tycoons who had made their fortunes in Hong Kong were shifting their banking relationships overseas.
Diversification wasn't just about business models. It extended to all aspects—industries, production bases, suppliers, customers, and most critically, financial partnerships.
"That's good to hear," Bai Yushan said. "The news says lots of banks were hit this time. Too many people withdrew their savings."
"It couldn't be helped. Chinese banks are still too fragile," Yang Wendong said. "And to be fair, some of them really failed at risk management. Let this be a lesson."
This crisis had been a coordinated move by the colonial government and British banks. They had used legal methods to seize the wealth of Chinese banks. If successful, they would not only gain lucrative assets but also reinforce their market dominance—while keeping Chinese banks silent.
Yang Wendong had power now, but even he couldn't save everyone. Saving Hang Seng gave him a substantial return. Saving others? That was just charity—and it would make him a target for both the British banking cartel and the colonial government.
Though Yang Wendong no longer feared British capital the way he once had, there was no need to antagonize them unnecessarily.
In the days that followed, everything proceeded as usual. Within Changxing Group, the only division that had any dependency on Chinese banks—Changxing Real Estate—had already liquidated its holdings and withdrawn. The ongoing bank runs had little direct impact on Yang Wendong's businesses.
The only issue was that a significant number of employees were still on leave. Given the sheer number and the personal importance of the matter to those involved, the company could do little but approve the requests.
"Mr. Yang, over the past two weeks, we've lost about 5% of our production capacity," Wei Zetao reported. "And that's even after I had everyone who didn't take leave work overtime to compensate."
"Looks like setting up production bases in Taiwan and Singapore was absolutely the right call," Yang Wendong said after a pause. "As for those who volunteered to work overtime—give them a generous bonus once this all settles down."
"Understood," Wei Zetao nodded. "I've been watching the colonial government's recent movements. It looks like the bank run is finally winding down."
"Maybe so," Yang Wendong replied with a faint smile. "But this run has already caused serious damage to the banks. The ripple effects on Hong Kong's economy are going to be long-lasting."
"Exactly," Wei Zetao agreed. "A lot of people withdrew their money. Sure, they preserved their principal, but they lost a lot in interest. Consumer spending is definitely going to shrink.
And the banks—after taking such a hit—will be extremely hesitant to issue loans."
"That doesn't concern us too much. We're export-focused," Yang Wendong said. "Right now, the priority is restoring full production. At the same time, we need to accelerate the process of relocating our new capacity to Taiwan and begin preliminary discussions with the Singaporean government."
"Yes, Mr. Yang," Wei Zetao acknowledged.
By mid-March, on the 15th, Fang Xianming of Changxing Financial and Zou Wenhuai arrived at Yang Wendong's office.
"Both of you together?" Yang Wendong asked with interest. "Your business areas don't usually overlap."
Fang Xianming spoke first. "Mr. Yang, here's the situation. Last month, after we invested in Hang Seng Bank and helped it survive the run, several small banks in Hong Kong approached me, asking for help.
Originally, per your instructions, we weren't going to get involved with any other banks. But one bank—Far East Bank—is a special case. The owner also controls over twenty cinemas, and he's willing to sell them to us. So I brought Mr. Zou to discuss it. We think it could be a good deal."
"Far East Bank? Is the owner Qiu Dekun?" Yang Wendong asked.
By 1965, many of the famous tycoons from his past life were beginning to establish themselves. Qiu Dekun was one of them.
He had started out in the cinema business, building mobile cinemas in remote rural areas and screening older films. Though the tickets were cheap, the operating costs were even lower, making profits high. Within a few years, he had made millions. He then expanded by building rural movie theaters and later used the profits to enter banking, establishing Far East Bank.
But during this wave of bank runs, the smaller the bank, the harder it was hit.
"Yes," Fang Xianming confirmed. "Qiu Dekun's Far East Bank is also under heavy pressure from the run. He wants us to invest, similar to what we did with Hang Seng.
He even brought his financial records directly to my office. From what I saw, there are no major issues. Like Hang Seng, he's just been caught in the crossfire of the panic."
"If there are no major issues, we don't invest," Yang Wendong said flatly. "The moment we step in to save a second bank, every other bank in Hong Kong will come knocking. That would be a nightmare."
According to historical records, after this crisis, only Hang Seng was acquired by HSBC. The rest of the Chinese banks either collapsed or stagnated until the 1980s, when Chinese capital began to rise again. Even then, they never matched the British banks.
Investing in Hang Seng wasn't a risk-free move, but Yang Wendong had faith in He Shanheng's abilities. It was a calculated gamble.
But the rest? Not worth it.
Zou Wenhuai spoke up. "Mr. Yang, I've reviewed the location of Qiu Dekun's cinemas. They're actually very well selected. If we can acquire them, it would significantly strengthen our control over Hong Kong's theater network."
"In that case, go talk to Qiu Dekun," Yang Wendong said after some thought. "But don't offer current prices. Push them down—hard. I predict property prices will drop by at least 50%. Use that projection to negotiate.
As for the bank, don't invest. One bailout is manageable. More than that, and someone's bound to accuse me of exploiting the crisis to snatch Chinese-owned businesses at low prices."
In truth, property values would plummet by more than 50% in 1967. But according to historical records, Far East Bank was eventually taken over by a U.S.-based bank during the crisis. If that hadn't happened, and if Qiu Dekun didn't feel enough pressure, he might not be willing to sell his theaters.
So paying slightly more than rock-bottom for a mature cinema chain wasn't a bad deal. The strategic value was high, even if the current profit wasn't.
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