Chapter 49: The Shipping King’s New Strategic Deployment
On Friday evening, the chairman's office at Global Shipping Group's headquarters in Prince's Building, Central, remained brightly lit.
The atmosphere was heavy.
Pao Yue-kong sat beside the tea table, his brows tightly furrowed as he gently held a teacup. Although the fragrance of the tea drifted through the room, it did little to ease the concern weighing on his mind.
Across from him sat his son-in-law, Wu Guangzheng, whose solemn expression and rigid posture betrayed his own anxiety.
"Father-in-law, the situation is becoming extremely difficult.
"Although we have HSBC's full support, which has stabilized our financing and allows us to raise substantial funds whenever necessary, we're now locked in an increasingly intense battle against the Jardine group.
"Even though our cash reserves remain relatively healthy for the moment, if this continues, they'll soon be exhausted as well.
"I'm afraid we can't guarantee victory in this fight for control of Wharf."
Wu Guangzheng's voice was filled with concern.
After thinking silently for a long while, Pao Yue-kong finally spoke.
"Guangzheng, starting tomorrow, you'll become the chairman of Lung Fung International."
As he said those words, the deep furrows on his forehead gradually relaxed.
It was obvious he had already conceived a new strategy.
"Father-in-law... why?"
Wu Guangzheng looked puzzled.
In his opinion, they had reached the most critical stage of the battle for Wharf.
As one of the campaign's key figures, how could he possibly leave Global Shipping Group now to take over Lung Fung International—a company that, from their perspective, was little more than an empty shell?
Lung Fung International was an old company with a history spanning more than sixty years.
Its primary business had once been securities investment and lending.
After changing hands several times, it eventually came under Pao Yue-kong's control, becoming an important piece within the Pao family's commercial empire.
Not only had it served as an effective vehicle for raising capital to support the family's shipping businesses, but it had also quietly driven Global Shipping Group's expansion behind the scenes.
One could say that Lung Fung International had played a major role in helping Global Shipping Group grow into the powerhouse it was today.
"Guangzheng, I have a new strategic plan."
Pao Yue-kong spoke seriously.
"I intend to use Lung Fung International to raise capital through new share issues and deferred shares.
"Then we'll have Lung Fung International repurchase all of the Wharf shares we currently own at a premium price.
"In this way, we'll raise another large pool of capital.
"As long as we can avoid borrowing more money from HSBC, we'll postpone doing so. We haven't reached that point yet.
"This approach will reduce my personal financial burden while allowing us to preserve our strength for a prolonged struggle against Hongkong Land.
"It gives us flexibility—we can advance when the opportunity arises or retreat if circumstances demand it."
Pao Yue-kong understood perfectly well that Lung Fung International's status as a publicly listed company served as a powerful shield.
Even if this corporate war ended badly, it would help cushion the impact and prevent catastrophic losses to the Pao family's wealth.
Transferring the Wharf shares into Lung Fung International's hands was therefore an ingenious move.
It preserved their ability to counterattack while also safeguarding the long-term stability of the family's business empire.
Selling the shares to Lung Fung International truly was a strategy that allowed both offense and defense.
After decades navigating the business world, every move Pao Yue-kong made reflected extraordinary commercial wisdom and remarkable courage.
He would never allow himself—or his family—to be pushed into an irreversible disaster.
Instead, he always sought to achieve the greatest long-term benefit at the smallest possible cost.
After listening to Pao Yue-kong's explanation, Wu Guangzheng immediately understood his father-in-law's intentions.
As Pao Yue-kong's son-in-law, Wu Guangzheng was also a gifted businessman.
The only thing he lacked compared to Pao Yue-kong was experience.
"I understand, Father-in-law.
"Starting tomorrow, I'll officially assume leadership of Lung Fung International and personally oversee the plan to acquire all of our Wharf holdings."
Pao Yue-kong nodded approvingly.
"Very good.
"From now on, future acquisitions of Wharf shares will no longer be carried out directly under the Pao family.
"Instead, they will be conducted through Lung Fung International.
"This matter is of enormous importance.
"I'll personally speak with Mr. Michael Sandberg and Mr. Li Ka-shing.
"Their support will be critical to the success of our plan."
As for Michael Sandberg, there was hardly any need for explanation.
As Chairman of HSBC and one of the bank's most influential figures, his attitude carried tremendous weight.
Without Sandberg's support, Lung Fung International alone would struggle to earn widespread confidence in the market within such a short period.
However, if Sandberg agreed to have HSBC subscribe to a portion of Lung Fung International's new share issuance, it would represent an enormous endorsement of the company's credibility and financial strength.
Such backing would significantly enhance its influence in the capital markets and lay a solid foundation for the coming acquisition campaign.
As for Li Ka-shing, Pao Yue-kong valued him for an entirely different reason.
It was Li's remarkable stock market operations.
Li Ka-shing's astonishing rise over the past several years owed much to the exceptional abilities of his professional trading team.
If Li agreed to help, his team could even underwrite and distribute part of Lung Fung International's new share offering.
Pao Yue-kong and Li Ka-shing had known each other for many years.
Their relationship was exceptionally close, and they had long since become trusted business partners.
"Father-in-law," Wu Guangzheng suddenly said, "I have another suggestion regarding our current predicament.
"It may be expensive to implement, but it could quickly widen the gap between us and Hongkong Land in terms of Wharf holdings, allowing us to firmly establish our market advantage."
"Oh?"
Pao Yue-kong's eyes lit up.
"Tell me your idea."
Wu Guangzheng organized his thoughts before speaking.
"Over the past week, besides ourselves and the Jardine group aggressively accumulating Wharf shares, I've noticed another group quietly entering the market.
"They're powerful market operators with substantial capital.
"They began accumulating shares back when the stock was still trading between HK$30 and HK$40.
"The reason we were able to purchase so many shares on Thursday was largely because these operators were willing to sell.
"Now that news of the battle between us and Jardine has spread, this development is unavoidable and entirely expected.
"I believe many of these market operators are still holding significant positions in Wharf, waiting for the right opportunity.
"If we can persuade them to transfer those shares directly to us, we'll be able to widen our lead over Hongkong Land without alerting them, giving us a substantial advantage."
His reasoning was clear and methodical.
After hearing his son-in-law's proposal, Pao Yue-kong smiled with approval.
It truly was an excellent idea.
Although acquiring those shares privately would come at a considerable cost, battles in the stock market had always required enormous financial commitment.
Besides...
Having already reached this stage, there was no longer any room for retreat.
Backing down now would only magnify their losses.
"This plan is feasible."
Pao Yue-kong nodded.
"I'll personally contact these people through private channels.
"As for you, Guangzheng, take over management of Lung Fung International as soon as possible.
"There will be another hard battle waiting for us next week."
Hong Kong was neither especially small nor particularly large.
After decades dominating Hong Kong's business world, Pao Yue-kong knew the city like the back of his hand.
He was well acquainted with virtually every major stock market operator in Hong Kong.
Some were even on good personal terms with him.
Among them, there would certainly be quite a few willing to do him a favor.
In addition, the stock exchange's traders—recognizable by their signature red trading jackets—possessed extensive industry connections and networks.
Although strict regulations prevented them from disclosing confidential client information, Pao Yue-kong could still make clever use of those relationships.
Through indirect channels, he could quietly communicate his interest in purchasing shares privately to certain important brokerage clients, helping advance his broader strategic plans.
(End of Chapter)
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