Chapter 114 - Stirring Up a Big Mess!
After obtaining the plan from Harry Centurion, the five shareholders of Qingzhou Cement Company quickly left and went to one of their homes to continue discussing.
"I think simply filing a joint complaint isn't enough. We should stir things up, make the whole of Hong Kong aware of this situation. Then the Securities and Futures Commission of Hong Kong will have to take it seriously!"
"Henry's suggestion is excellent. I happen to know a journalist at the Oriental Daily. I'll contact him later."
"I also know a reporter from the Hong Kong Securities Times. Count me in."
"The editor-in-chief of the South China Morning Post is my friend. I'll handle that connection."
"We're British. The Securities and Futures Commission will definitely favor us. We have the right on our side!"
"Good. Let's first draft a joint complaint letter. Everyone will sign it, and I'll personally deliver it to the Securities and Futures Commission."
...
That very day, a joint letter was placed on the desk of Mike Smith, the Commissioner of the Hong Kong Securities and Futures Commission and Chairman of the Takeovers and Mergers Panel.
After reading the letter, although Mike Smith did not initially view it as a top priority, he still sent staff to investigate the background of the case — after all, it involved British citizens.
The investigation wasn't difficult; the public records were clear.
Lin Haoran had previously mentioned in media interviews that they held more than 50% of the shares.
Thus, the Securities and Futures Commission convened a meeting to discuss the Lin family's ownership of Qingzhou Cement Company exceeding 50%.
After the meeting, the Securities and Futures Commission unanimously concluded that since the Lin family controlled more than 50% of the shares, they had triggered a full takeover obligation and should initiate a full acquisition of Qingzhou Cement Company.
Moreover, the Lin family had not consulted the panel beforehand, violating the spirit of fairness to all shareholders enshrined in the Takeovers and Mergers Code.
They decided that the Lin family should be required to make a takeover offer to all shareholders based on the highest stock price of Qingzhou Cement Company in the past six months.
It was obvious — this decision clearly favored the British shareholders.
The next day, Qingzhou Cement Company's General Manager, Burton, received an official letter from the Securities and Futures Commission.
At the same time, several newspapers in Hong Kong received tips from the British shareholders.
Soon, media outlets such as Oriental Daily and Hong Kong Securities Times stationed reporters outside the Securities and Futures Commission headquarters, waiting for interviews.
Initially, Mike Smith wasn't aware of what was happening.
But once he understood their intentions, he agreed to an interview.
"Regarding the matter of Qingzhou Cement Company, we have completed our investigation and convened an internal meeting.
Since you want to know, I will now, on behalf of the Securities and Futures Commission, publicly address the issue."
"Based on our investigation, Mr. Lin Haoran and his family do indeed hold more than 50% of the shares.
After our discussion, we have sent an official letter to Qingzhou Cement Company recommending that Mr. Lin Haoran and his family make a general offer to all shareholders based on the highest stock price recorded by Qingzhou Cement Company in the past six months," Mike Smith explained calmly to the reporters.
Immediately, the reporters were energized.
This was exactly the kind of news that would spark widespread public interest and heated debate.
After interviewing Mike Smith, the reporters rushed to Qingzhou Cement Company, hoping to interview Chairman Lin Haoran.
However, they were disappointed to find that Lin Haoran was not at the company.
They had no choice but to interview General Manager Burton instead.
At that moment, Burton had already seen the letter from the Securities and Futures Commission and had informed Lin Haoran.
Facing the reporters, Burton simply said,
"We have just received the Securities and Futures Commission's letter and have not yet had time to respond.
We will issue a public announcement later," and managed to send the reporters away.
Naturally, matters like this had to be decided by the chairman. As general manager, Burton had no authority to comment independently.
In Causeway Bay, inside the Chairman's Office of Wan'an Group.
After receiving Burton's call, Lin Haoran didn't rush to Qingzhou Cement Company.
Instead, he asked Burton to fax him a copy of the letter.
"Daddy, how should we handle this?" Lin Haoran asked, handing the document to Lin Wanan.
He hadn't expected the British board members of Qingzhou Cement Company to pull such a move.
Privatizing Qingzhou Cement Company wasn't a problem; he had planned it all along.
The problem was that the Securities and Futures Commission was now demanding he buy out all remaining shareholders at the highest stock price over the past six months — something he was not willing to accept.
When he first became chairman, Qingzhou Cement Company's stock had peaked at six Hong Kong dollars per share.
Now it had dropped to just over three dollars.
Such a large gap — he was not willing to bear that loss.
Currently, the Lin family controlled 68.4% of Qingzhou Cement Company's shares, leaving only 31.6% in public hands.
If he bought the remaining shares at an average price of four Hong Kong dollars per share, he would only need to pay an additional 63 million Hong Kong dollars to fully privatize the company.
But if forced to buy at six Hong Kong dollars per share, the cost would rise to almost 95 million Hong Kong dollars.
That was over 30 million Hong Kong dollars more — money Lin Haoran was not prepared to throw away.
He didn't even have the cash right now, and even if he did, he wouldn't be willing to spend it foolishly.
If he could acquire cheaply, why buy expensively?
"Haoran, let me think.
Wan'an Group has never encountered a situation like this before.
Also, Qingzhou Cement Company is the first British-owned enterprise acquired by Chinese capital.
This is unprecedented.
Besides you, there are still several British shareholders, and the Securities and Futures Commission is full of British people.
Of course they are siding with their fellow countrymen," Lin Wanan said thoughtfully.
"Daddy, I want to ask — are we legally required to follow the Takeovers and Mergers Panel's recommendations?" Lin Haoran asked.
He had no money.
Surely they couldn't force him to buy shares without the funds?
"Not necessarily," Lin Wanan replied.
"The takeover rules state that exceeding 50% triggers a full acquisition obligation, but they don't mandate a specific acquisition price.
The Securities and Futures Commission's recommendation to use the highest price is clearly favoring the British shareholders."
"But what can we do?
Hong Kong is still governed by the British.
We can't afford to completely offend the Securities and Futures Commission.
Otherwise, they could make trouble for you — blocking land auctions, delaying approvals, and creating endless hurdles for your business."
In another world, during the Wharf Holdings acquisition battle, Bao Yugang faced similar harassment from the Securities and Futures Commission.
They tried to force him to offer 105 Hong Kong dollars per share to remaining Wharf shareholders.
However, Bao Yugang, backed by Hong Kong and Shanghai Banking Corporation, refused — and ultimately, the matter was dropped.
But Lin Haoran didn't have Bao Yugang's kind of backing.
Still, Qingzhou Cement Company was no giant like Wharf Holdings.
The Securities and Futures Commission likely wouldn't take it that seriously.
"So basically, we have to give them enough face, right?" Lin Haoran concluded.
"Exactly," Lin Wanan nodded.
In the short term, Lin Haoran wasn't planning to privatize Qingzhou Cement Company anyway.
His biggest obstacle was lack of funds.
He needed to wait several more months.
Although oil prices were rising rapidly every day, it would take until around June next year for them to double — which would bring him the cash he needed.
For now, he had to continue studying enterprise management at Wan'an Group and carefully manage Qingzhou Cement Company.
Without money, everything was limited.
In fact, even Lin Wanan hadn't expected the Securities and Futures Commission to pay attention to Qingzhou Cement Company.
Otherwise, he would have stopped Lin Haoran from continuing to buy shares earlier.
"Perhaps I should go to the Securities and Futures Commission personally," Lin Haoran said.
Clearly, his father didn't have any better solutions for now.
They would have to take things step by step.
Government agencies could not be openly offended.
It was obvious someone had tipped them off — probably the British shareholders angry about losing money after the stock price collapse.
If not for their interference, it was unlikely that the colonial authorities would bother with a relatively small company like Qingzhou Cement Company.
Those British shareholders were clearly troublemakers.
Even though Lin Haoran had stayed away from them recently, it didn't mean they wouldn't cause problems behind his back.
Getting rid of Harry Centurion had not been enough — the other shareholders had to go too!
Since that was the case, Lin Haoran decided he would first go to the Securities and Futures Commission, probe the situation, and negotiate reasonably to meet the minimum requirements without offending the government.
"There's no other way.
They've already issued the letter.
We can't just ignore it," Lin Wanan said with a bitter smile.
At that moment, neither father nor son knew that the media already had the story — and that within a day, all of Hong Kong would know.
Thus, Lin Haoran decided not to rush to Qingzhou Cement Company but to head first to the Securities and Futures Commission to talk with the officials.
At around five in the afternoon, Lin Haoran arrived at the Securities and Futures Commission headquarters.
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