As previously introduced, Peregrine Group provided an unsecured loan to an Indonesian bus company in order to seek to underwrite a high-interest bond for the company.
However, due to the lack of careful analysis of the company's financial situation, the bus company was unable to issue bonds amid the increasingly intensifying financial crisis in Southeast Asia, which put Baibenqin's capital flow in trouble and a serious financial crisis suddenly emerged.
In fact, Peregrine has sold off up to US$2.1 billion of high-quality assets in order to solve its financial dilemma.
And it also asked for help from many sources. First, it announced the introduction of Zurich Center Group (ZCI) as a strategic shareholder. Zurich Center Group subscribed for US$200 million in redeemable convertible preferred shares;
Then it was announced that First Chicago Bank in the United States had subscribed for Peregrine redeemable and convertible preferred shares with a face value of US$25 million under the same terms as Zurich Center Group.
Originally, this had given Peregrine a breath of relief. However, just after New Year's Day in 1998, the Asian financial crisis further worsened, and the price of the Indonesian rupiah against the U.S. dollar fell sharply again. Against this background, Zurich Center Group and First Chicago Bank of the United States
On January 9, 1998, they respectively announced the cancellation of the redeemable convertible preference shares subscribed for Peregrine, which led to the deterioration of Peregrine's financial condition.
While everyone was dumbfounded, Peregrine was faced with redemptions from a large number of customers. When a certain bill bounced, Peregrine's business was forced to suspend, and it could only apply for automatic liquidation...
Immediately afterwards, the Hong Kong Securities Regulatory Commission announced that it had issued a restriction notice to Peregrine, prohibiting it from handling assets. Its listed company, Peregrine Investment, was suspended from trading on the Hong Kong Stock Exchange indefinitely...
What does that mean?
Judging from Peregrine's asset structure, it actually still owns a large amount of assets and has not reached the level of insolvency at all.
However, the substantial depreciation of the currencies of Southeast Asian countries and the excessive expansion of the Asian bond market put Peregrine into financial difficulties. These assets simply could not be cashed out immediately.
And a large number of customers continued to redeem, causing Peregrine's cash flow to dry up. Due to the failure of recruiting reinforcements, orders suddenly appeared to be bounced.
Bounced checks are commonly known as bad checks. Hong Kong's financial laws are very strict on bounced checks. As long as they appear, they will be immediately wiped out - liquidated and settled!
Unlike in the Mainland, it doesn't matter if you make a bad check. You can negotiate with the bank and the customer. So there is room for triangular debt and lame debts to survive.
Hong Kong is not like that. Even if the company has a net worth of 100 million, as long as there is a bad check for a small amount of money, the account will be frozen immediately and the company will be forced to go bankrupt. There is no mercy at all.
Therefore, this is where Peregrine suffered. It was tantamount to sudden death.
…
Such a sudden death, of course, shocked the whole of Hong Kong. The stock market plummeted again, and everyone even panicked - even a large and powerful investment bank like Peregrine collapsed? There was no warning at all.
A big hole was dug out all of a sudden? Who can rest assured? I wonder if the big companies in Hong Kong have other big holes. Are we, the Hong Kong citizens, left to fill the holes?
One thing to say, it is really surprising. However, in the midst of the panic, Brother Yuan, who had not been seen for a long time, once again made wild remarks.
There happened to be a Hong Kong talk show interviewing the famous director Yuan Ge, the latest Cannes Palme d'Or film "Slumdog Millionaire".
"...Yuan Shao, thank you for sharing your creative experience. Winning honor for our Chinese films."
"This is nothing. The main reason is that Hong Kong has a good creative environment and the filmmakers here are first-class professionals. It is precisely because the background of "Slums" is the Kowloon Walled City that it can be filmed authentically. There are also excellent performances by several actors."
"Then as a director, you must get the first credit?"
"Haha! It's not that exaggerated." Li Yuan said with a smile, "Actually, when it comes to artistic creations, such as writing books and making movies, I am only a third-rate person. In terms of computer and IT skills, I am only a second-rate person. What I am really first-rate in is my ancestral hunting skills.
.That is, wilderness hunter, wilderness tracking. Unfortunately, I have been living in the city, and the ancestral craftsmanship has been abandoned. Alas——! "
"Ah? What about your business?"
"That's just not popular. There's nothing worth bragging about."
"Ah?" The female host was already charming and liked Brother Yuan's nonsense the most. "Young Master Yuan, are you really the best at hunting?"
"You don't believe it? My ancestors also hunted tigers, and there is still a tiger skin passed down in our family." Li Yuan closed his eyes and boasted, "It's really not a boast, it's not forced by life. Who would want to leave their hometown?"
"Ahem, cough, cough, cough, cough!" The hostess laughed so hard.
Are you forced to live like this? Are you forced to leave your hometown like this? Can't you just change it? From any angle, Brother Yuan is a super winner in life.
But what I like most about this kind of entertainment program is this kind of nonsense.
"Young Master Yuan, what about the feud between you and Mr. Wenfu?"
"People who are not jealous are mediocre!" Li Yuan seemed disapproving, "So what I hate most is those so-called experts who talk nonsense all day long and waste media resources to gain fame and fortune for themselves."
"Uh... Is it okay? Mr. Wenfu has always spoken uprightly, and he is quite popular." The female host hesitated in defense. After all, Wenfu is also labeled as the "conscience of Hong Kong". He also has the highest ratings in the stock review program.
guarantee.
Li Yuan didn't care about the female host's words: "Haha, what's the use of welcome? Isn't the current stock market in Hong Kong still messed up by this group of people?"
"Uh..." the female host was even more speechless, "Mr. Wenfu is a stock commentator, the stock market should have nothing to do with him... right?"
Again, this is an entertainment program. The female host wanted to bring the topic back as soon as possible.
Unexpectedly, Li Yuan seemed to be talking about sex: "Why doesn't it matter? Under the heavy snow, not a single snowflake is innocent."
This chapter is not over, please click on the next page to continue reading! "Uh..."
"It seems that I heard the latest news. A company called Peregrine also went bankrupt, right? It has brought great damage to our Hong Kong!"
"Uh...it seems that there is something like this." The female host looked embarrassed. Please! We can't grab the content of financial programs here? Please, Mr. Yuan, just talk about some gossips in the entertainment industry and make some scandals.
That's all right?
"Did you see? Even Peregrine was bankrupted by them? Hong Kong's economy is taking a pill!"
"Well……"
"As for those regulatory departments, the commercial crime investigation department of the police station, etc., if you put a dog on it, it will be more useful than you! It is better to buy a piece of tofu and kill it!..."
(100,000 words have since been deleted!)
…
Li Yuan's outrageous remarks on the show once again caused a sensation in Hong Kong and became the headlines of major media.
Because it was so explosive. I was scolded in public and almost all relevant organizations in Hong Kong were scolded.
Don't worry, this time, Li Yuan's curse won a round of applause. He finally found a scapegoat to vent his anger on.
And those institutions were dumbfounded by the scolding. Mr. Yuan, have we not offended you? How can we slander others? It was clearly Peregrine who committed suicide, so how can we blame others?
So those agencies immediately rushed to public relations. They sent the specialist responsible for handling the Peregrine incident—Zhang Muhai.
"...We take the general public's doubts very seriously. We will also strictly review the supervision procedures and have found no violations..."
"...Peregrine's bankruptcy liquidation is mainly due to loopholes in their internal management, which led to the occurrence of ticket bounces. We will also strictly investigate in accordance with the law and will give the general public a satisfactory answer..."
"... In terms of procedures, we have done everything possible and strictly followed all laws and regulations. Hong Kong is a place where the law is respected, and we will ensure the healthy operation of this Far East financial center..."
"...For some people's words, we respect their freedom of speech. We hope that we can eliminate misunderstandings and stop misleading public opinion..."
Zhang Muhai's words prove that he is not wrong, and he abides by procedural justice. And he hopes that Li Yuan will not be like a mad dog, biting anyone he sees, right? Can you give me some face and talk nicely?
Obviously, conventional treatment methods like this have no effect on a certain villain.
For example, the CCB madam didn't want to stand out, knowing that Li Yuan would cause trouble. Commissioner Zhang Muhai was still too naive?
Sure enough, these words were immediately met with a head-on blow: "...Now look around Hong Kong, those countries in Southeast Asia? And Japan and South Korea? Which one is not in a precarious situation, and is about to go bankrupt? In this case, Hong Kong can still
We are as stable as a mountain, shouldn't we make a decisive decision?..."
"...I found that they grew up eating grass. They took action when it was time to take action without any hesitation. This big ship in Hong Kong is encountering a storm and typhoon. Are they sailors still working on the clock? Of course.
To deal with this emergency..."
Zhang Muhai also couldn't bear it anymore: "... remind some people not to say these layman's words. Haven't we done something? We are all very professional? I promise here that we will try our best to avoid the impact on Hong Kong's economy..."
Li Yuan was also not to be outdone: "What's the point of being professional? Just being a professional audience and watching the ship sink?"
"Nonsense! Then please teach me how to save Peregrine? This is not the fault of our regulatory authorities. We can't blame their company management mistakes on us?"
"Joke! As far as I know, as long as Peregrine obtains capital turnover, it can maintain operations. At least the interests of their hundreds of thousands of shareholders can be protected, right? Don't you stop working after collecting so much tax? Absolutely
We can nationalize Peregrine, wait until it is rescued, and then privatize it. Only in this way can we reduce economic turmoil as much as possible and protect the interests of Hong Kong citizens..."
"I really don't want to say bad things. What kind of bad idea is this? The money collected from taxation belongs to all Hong Kong citizens. How can it be used to rescue a private investment bank? If it is all for public benefit, it will harm other people.
It has nothing to do with the interests of the public. That is what undermines Hong Kong’s status as a financial center..."
"Do you know what a financial center is? If you let everyone get rich together, that's what you call a financial center. If you let everyone go bankrupt, you can enact too many laws to wipe your butt, but it will still become a garbage dump..."
"It's so funny, that Yuan Shao is just messing around. He doesn't even have the most basic economic knowledge..."
"I don't have one? I have an investment bank in Han Palace. I also saved Yazhan. I have more experience than you! So don't make excuses. They are a bunch of waste! Waste! What I said is not wrong at all - pull
No dog can do better than them!"
"..."
…
All of a sudden, the two sides were fighting fiercely in the air, and the quarrel was so dark that all the Hong Kong citizens were stunned.
In fact, this is a battle between lines - procedural justice and factual justice.
Everyone should know about procedural justice. Zhang Muhai abides by this principle.
It should be said that there is nothing wrong with procedural justice in itself, especially government agencies and the judiciary, who particularly like this kind of procedural justice. And in daily handling of affairs, as long as procedural justice can be guaranteed, people can always be reassured and will never be regarded as
Things get messed up.
But Li Yuan's factual justice, to put it simply, is - follow the authority in urgent matters!
If a major emergency occurs, can we still maintain procedural justice in a slow manner? We must be flexible and eliminate the crisis as much as possible.
However, there is a very serious problem now - Hong Kong has just returned to China.
In those organizations in Hong Kong, most of them used to be affairs officers, not decision-makers, and their professional abilities were certainly not good enough. However, when emergencies occurred, their eyes suddenly darkened.
The other thing is wanting to get things done.
You should be able to understand this mentality - since they are the masters of the country, they must follow the procedures more strictly and cannot change even the slightest bit.
Therefore, when the Peregrine incident occurred, the "nationalization" proposal put forward by Li Yuan was simply a scourge and almost destroyed Zhang Muhai's belief.
But what about Li Yuan’s factual justice?
If there really is a major crisis, what broken procedures and laws are there in charge?
Just like the Enron incident in the United States later, and the subprime mortgage crisis in 2008, which created a huge hole worth tens of trillions of dollars, wouldn't Eagle still inject capital into financial institutions? And it would also inject money into Fannie Mae and Real Estate, which were too big to fail.
Is the United States civilized?
This is to follow the principle of urgency. It does not mean that procedural justice is not followed, but it must not be taken to an extreme. It still depends on the priority.
The economy is about to collapse. Do you still care about procedures? That’s what it means.
This is a mature move made by a mature government.
Therefore, the relationship between the two is not antagonistic, and there is no right or wrong. In this fierce financial crisis, all possible means must be used to truly reduce the losses to Hong Kong's economy!
