Chapter 450 The Governor's Humble Plea, Offering Generous Terms
Hearing Lin Haoran's response, Murray MacLehose breathed a slight sigh of relief. At least Lin Haoran was not someone entirely impervious to reason, which was a good sign. He had genuinely been concerned that Lin Haoran, having seen his wealth skyrocket, might become arrogant and unapproachable. Although, as the Governor of Hong Kong, he wielded nearly supreme power in the territory, he was by no means a tyrannical figure; on the contrary, he placed great importance on maintaining his reputation. It was precisely for this reason that, during his tenure as Governor, he had implemented many policies benefiting the populace, winning deep affection from the citizens of Hong Kong. Moreover, Lin Haoran was no ordinary individual, but a super-rich tycoon with immense influence. This could be seen clearly from the recent turbulence in the real estate market. Had it been someone else, say Li Jiacheng, even if Li Jiacheng had ordered Cheung Kong Holdings to sell off real estate projects en masse, it might not have stirred such a massive wave. Yet merely guiding public speculation that Lin Haoran might have lost confidence in Hong Kong real estate caused a tremendous market reaction. This alone demonstrated that Lin Haoran's influence over Hong Kong's real estate sector was unparalleled. The public's views and speculations about him were enough to sway the market's direction. Therefore, unless absolutely necessary, Murray MacLehose was unwilling to fall out with Lin Haoran.
"Mr. Lin, actually, restoring public confidence in Hong Kong's real estate market is quite simple. I have a method, and you will benefit greatly from it," Murray MacLehose said with a hint of pain as he looked at Lin Haoran. Seeing his expression, Lin Haoran was a little puzzled. What kind of expression was that? "Please go ahead, Governor," Lin Haoran said politely, still maintaining curiosity despite his confusion.
"Tomorrow, January 1st, at 3:00 PM, the Lands Department will be holding a government land auction. I believe Mr. Lin is already aware of this?" Murray MacLehose asked.
"Yes, Governor, Mr. Ma from Jardines Matheson has already mentioned it to me," Lin Haoran nodded.
"My plan is very simple. The government will be offering five extremely prime plots of land for auction tomorrow. I believe Mr. Lin should be familiar with these plots. I sincerely hope that Jardines Matheson can actively participate in the bidding for these five plots and strive to secure them all.
As a reward for Jardines Matheson's support, I represent the government in promising that for these five plots, Jardines Matheson will only need to pay the auction closing price. All additional costs, such as stamp duty, land premiums, land price adjustments, and auction commissions, will be completely waived by the government.
This way, Mr. Lin will undoubtedly save a significant amount of money. I wonder what you think of my proposal?" Murray MacLehose spoke slowly, his voice carrying a trace of hope and pain. After speaking, he handed a document to Lin Haoran, which contained even more detailed information about what he had just said.
Lin Haoran quickly finished reading the document and then looked up at Murray MacLehose. If Murray MacLehose claimed he felt no turmoil inside, he would be lying to himself. Normally, government land auctions had clear rules: besides the bid price, the successful bidder also had to pay an additional 10% to 15% of the transaction amount in fees, including auction commissions and stamp duties, all of which eventually flowed into the Hong Kong government's treasury. Yet now, to persuade Jardines Matheson to take over these five plots, Murray MacLehose had to grit his teeth and waive these sky-high fees. Just from the 3 billion HKD starting bid total alone, following standard practice, the government could have easily pocketed an additional 300 to 500 million HKD in fees. Such an enormous fortune was being given up just like that, and even a seasoned politician who had governed Hong Kong for nearly a decade couldn't help but feel heartache.
What made it even harder to swallow was the inherent value of these plots. The Central Admiralty plot overlooked Victoria Harbour, the Causeway Bay site was next to the racecourse, the Tsim Sha Tsui East lot lay in a core location... Had it been six months earlier, when the real estate market was booming, these plots would have been fiercely contested by all the financial groups in Hong Kong, becoming priceless treasures. According to the Lands Department's estimates, under normal conditions, these prime locations could have fetched at least 50% more than the starting price, making their final sale price easily exceed 4 or 5 billion HKD. The locations of these five plots were absolutely prime, and the 3 billion HKD starting price was really not high. Of course, the starting price couldn't be set too high either. But right now, forget about premiums—being able to sell them at the starting price would already be considered a blessing. It had come to the point where the dignified Governor had to humbly beg buyers to take them.
Yet this bitter pill had to be swallowed. If the auction failed, it would be tantamount to publicly announcing to all of Hong Kong: even the government no longer had confidence in the property market!
The citizens crowding the sales offices demanding refunds, the foreign investors withdrawing their capital overnight, the international short sellers eyeing Hong Kong like hungry wolves...
More importantly, negotiations with the mainland regarding Hong Kong's future were still at a very early stage, and even he himself was full of uncertainty about Hong Kong's future.
Thus, Britain's instruction was simple: sell as much land as possible!
The proceeds from official land auctions would ultimately flow back to Britain.
Murray MacLehose did not want to see Hong Kong's real estate sector collapse during this sensitive period. At the very least, he hoped that any downturn could be delayed until after the negotiations concluded.
Before the negotiations ended, every piece of land that could be sold needed to be sold!
Although he was Hong Kong's Governor and a guardian of this land, he was also a British-appointed official, and at crucial moments, he had to prioritize Britain's interests.
Now, the fate of Hong Kong's real estate market rested on Lin Haoran's decision alone. Murray MacLehose's heart was complicated.
Looking out at the many skyscrapers of Central through the window, he suddenly recalled a saying from an old Chinatown fortune-teller:
"He who tied the bell must untie it."
This storm triggered by Jardines Matheson's sell-off ultimately had to be quelled by Lin Haoran himself.
Only if Jardines Matheson took over these five prime plots could the market doubts be dispelled and Hong Kong real estate see daylight again.
Lin Haoran's fingers lightly tapped on the redwood desk, the crisp sound reverberating in the Governor's office.
Outside, the midday sunlight streamed in through the glass curtain walls, casting sharp contrasts of light and shadow across Lin Haoran's chiseled side profile.
Murray MacLehose noticed that this young super tycoon's gaze remained fixed on the auction catalog on the coffee table, as if weighing the gold hidden within its pages.
"Governor, this generous gift reminds me of the rules at the Nanyang casinos," Lin Haoran suddenly chuckled, tracing his finger across the Central plot's blueprint. "The house gives you 30% of the chips upfront, tempting you onto the table to gamble your life."
Murray MacLehose's Adam's apple bobbed, and the silver spoon in his bone china coffee cup clinked faintly against the rim.
He suddenly realized that the coffee before him had long gone cold.
"Mr. Lin, you jest," the Governor said, wiping his forehead with a handkerchief. "This is merely a gesture of sincerity for the government and businesses to overcome difficulties together.
Look, this Central plot is adjacent to the Central Ferry Piers, and it's only about a hundred meters from your Jardines Matheson's Connaught Centre. In the future—"
"In the future, Jardines Matheson will relocate its headquarters to London," Lin Haoran interrupted, pulling a neatly folded South China Morning Post from his suit pocket.
The front page headline featured a photograph of Simon Keswick, current head of Jardines Matheson, announcing plans for the group to move out of Hong Kong.
"In recent years, dozens of British-owned companies listed on the Hang Seng Index have already relocated their headquarters or major operations to Singapore, the UK, the US, or Canada.
Even the British consortiums have no confidence in Hong Kong's future.
Governor, do you think I would spend 3 billion HKD of hard-earned capital to purchase these plots now?"
The office fell into dead silence.
The ticking of the Baroque-style gilded bronze clock suddenly seemed deafening.
Murray MacLehose's knuckles turned white.
He suddenly realized that the carefully crafted negotiating terms he had prepared were nothing more than a child's stack of toy blocks in the eyes of the young man before him.
The tax waivers and fee reductions he had painstakingly conceded were, from Lin Haoran's perspective, nothing more than a few discarded pawns on the chessboard.
"However—" Lin Haoran suddenly stood up, smiling at Murray MacLehose. "I can agree to the Governor's conditions and take all five plots, but what I want is not a tax waiver."
Murray MacLehose's eyes locked onto Lin Haoran, eager to hear what the young man would demand.
"After the land handover, Jardines Matheson should be allowed to defer payment of the remaining land price for three years. In return, not only will I pay off the 3 billion HKD after three years, but I will also pay all the additional fees and taxes as usual, without letting the government lose a single cent. Can the Governor accept my terms?"
Murray MacLehose's pupils shrank sharply.
This proposal took him by surprise. He had expected Lin Haoran to seize the opportunity to make harsher demands, such as further lowering the land price or requesting more favorable policies.
Yet asking merely for a three-year deferred payment, while still promising to pay all fees later, was entirely unexpected—and an excellent deal for the Governor's office.
At the very least, it would save the government hundreds of millions of Hong Kong dollars, and he could offer a better report back to Britain.
Still, allowing a three-year deferment would create a serious financial gap.
"Mr. Lin, you're asking for a very substantial financial buffer," Murray MacLehose quickly calculated the pros and cons of the proposal in his mind. "Delaying the payment for three years means the government will not be able to recover the auction funds within that period, which will significantly affect our fiscal arrangements."
Lin Haoran smiled slightly, as if he had long anticipated the Governor's concerns:
"Governor, I understand your worries. But allow me to explain: this arrangement is actually beneficial to both sides.
You know, when I acquired Jardines Matheson, I paid a huge price and am currently carrying massive loans from Citibank and HSBC.
Even though I made money when I invested in Apple during my trip to the United States, it was nowhere near enough to offset these enormous debts."
On Jardines Matheson's side, they had just recently acquired Hong Kong Telephone Company, which meant significant expenditures, and on top of that, Jardines Matheson already carried several billion Hong Kong dollars in debt. So while it might appear that Lin Haoran had plenty of capital, in reality, it was not abundant at all. Moreover, acquiring all five plots of land was not part of their original plan. Now the Governor was suddenly asking him to break from the plan, placing him in a very difficult position. Besides, the three-year grace period he requested from the government was not without cost; he would continue paying all the additional fees the Governor had promised to waive, meaning the government would not suffer a loss.
For Jardines Matheson, it would provide room to adjust their financial structure and respond to market uncertainties. For the government, although there would be a short-term delay in funds being recovered, in the long term, this arrangement would not only help stabilize market confidence but also ensure that the plots were properly developed, ultimately boosting the surrounding economy and increasing tax revenues.
"More importantly," Lin Haoran added, "I, Lin Haoran, guarantee with my personal reputation that three years later, Jardines Matheson will not only pay the full land price but will also make additional investments to turn these plots into new iconic landmarks of Hong Kong, contributing to the city's economic prosperity."
Murray MacLehose weighed the pros and cons in his heart. Deferring payment would sacrifice some immediate revenue, but if it helped stabilize the market and avoid a greater economic loss while ensuring greater tax returns in the future, it was not a bad trade-off. Moreover, with Hong Kong's real estate market currently on the brink of collapse, the Governor's Office wasn't really losing anything significant—only the auction funds would be delayed.
In his heart, he had already agreed to Lin Haoran's proposal and even wished he could agree to it immediately. However, perhaps because he had lost face during today's discussion, he was unwilling to agree too readily, hoping to salvage a bit of dignity.
Seeing that Murray MacLehose remained silent, Lin Haoran continued, "Governor, although we are asking for a three-year deferment, the government doesn't need to worry about whether we will be able to pay when the time comes. You can simply impose a restriction that we are not allowed to resell these plots before settling the payment. If we fail to clear the land price at the end of the period, the government can reclaim these plots."
For Lin Haoran, he had no intention of reselling these plots. In the future, these plots would be among the most sought-after pieces of land, priceless even if one had the money. With such a great opportunity, there was no way he would let them go.
"Mr. Lin, your proposal does put me in a difficult position," Murray MacLehose said slowly. "This matter is of great importance, so I need time to discuss it with the relevant departments. Before the auction, I will give you an official reply. Would that be acceptable?"
"Of course, Governor," Lin Haoran nodded in understanding. "I look forward to your reply and hope that Hong Kong's real estate sector can be restored to its former vitality."
"In that case, I won't keep you any longer, Mr. Lin," Murray MacLehose said, indicating that the meeting was over.
"Goodbye, Governor," Lin Haoran waved with a smile and bid farewell.
Although Murray MacLehose had not immediately agreed to Lin Haoran's proposal and had insisted on discussing it with various departments, Lin Haoran knew this was just procedural. Based on the Governor's attitude toward this matter, Lin Haoran was ninety-nine percent confident that the cooperation would succeed.
The reason he had remained unconcerned by the recent negative media reports was precisely because he had already made this plan. He had long had his eye on those plots, and if he could secure them all, it would be the best outcome. This way, the outside world would have no grounds to question his confidence in Hong Kong's real estate market.
Over the past few days, he had been carefully refining this plan. Unexpectedly, the Governor's Office had come up with the same idea and had even approached him first, offering favorable conditions. This had genuinely surprised and delighted him.
As for the several hundred million Hong Kong dollars the government wanted to waive, Lin Haoran wasn't particularly concerned. He knew that even if the government waived the fees now, they would probably find other ways to recover them later. From the pained expression on Murray MacLehose's face, it was clear that the government was reluctant to forgo that revenue. Accepting the waiver would essentially mean causing the Governor's Office a major loss, offending them in the process. After all, with power in their hands, the authorities had countless ways to recoup the money later. They could easily find excuses to slap huge fines on Jardines Matheson, Hongkong Electric, or Manching Group.
Thus, he would rather willingly bear the cost now than risk the government retaliating through backdoor means. Proposing a three-year deferment was the result of his careful deliberation. On one hand, it demonstrated to Murray MacLehose that he genuinely faced financial pressure; on the other hand, having over three billion Hong Kong dollars freed up for three years would be a tremendous advantage.
Although coming up with that much money all at once wasn't impossible for him, it would certainly affect his subsequent business maneuvers. Now, securing the five plots at minimal immediate cost while preserving his future strategic flexibility was the best outcome. Three years later, thirty billion Hong Kong dollars might be nothing to him—money he could easily spare. But right now, that cash was still crucial.
Thus, he proposed deferring the land price payments—a move reflecting both his honest financial situation and his far-sighted strategy. At current lending rates, borrowing thirty billion Hong Kong dollars from banks, even at the most favorable 10% annual interest, would cost him almost 10 billion in interest over three years. Now, it was as if he were getting a 30-billion-dollar interest-free loan to acquire five prime central plots.
As for the additional fees and taxes, they were standard obligations any developer had to bear.
After sending Lin Haoran off, Murray MacLehose immediately summoned the Financial Secretary, Lands Department, and the economic advisory team for an urgent closed-door meeting.
Meanwhile, Lin Haoran returned with his bodyguards to Connaught Centre. In the office of Jardines Matheson's General Manager, Ma Shimin noticed Lin Haoran's cheerful expression and couldn't help asking, "Boss, did you receive good news at the Governor's Office?"
"Mr. Ma, your guess is spot on!" Lin Haoran laughed heartily.
"The Governor's Office proposed a very favorable cooperation plan," Lin Haoran said, smiling as he walked to his desk, picked up a document, and handed it to Ma Shimin. "Take a look, Mr. Ma. We have a chance to acquire five premium plots under extremely favorable terms."
Ma Shimin took the document and read it carefully. As he read deeper, his brows gradually relaxed, and his face revealed a look of disbelief. "This... these terms are incredibly generous! The government is willing to waive all additional costs? As far as I know, this has never happened in Hong Kong's history. Even when Jardines Matheson was still a British firm and enjoyed special treatment, they still had to pay all these fees."
"Exactly. Governor Murray MacLehose is really going all out to restore public confidence in real estate," Lin Haoran nodded, his tone carrying a trace of emotion. "However, I refused their offer."
"That's saving at least four or five hundred million HKD! I can't believe you could pass that up, Boss. But honestly, I think you made the right call. The Governor's Office obviously offered these terms unwillingly. If we simply accepted such favors, the government would never let it go quietly," Ma Shimin said, strongly agreeing with Lin Haoran's decision.
"That's what I thought too," Lin Haoran smiled. "That's why I refused the government's concession. Instead, I proposed a different condition: after the auction, to defer the remaining land price payment for three years."
Lin Haoran smiled slyly, "This way, not only can we acquire the land at an extremely low immediate cost, but we will also have ample time to restructure our finances and deal with market uncertainties."
Ma Shimin slapped the table in admiration. "Boss, that move is brilliant! It preserves our cash flow and ensures we have enough capital for future project developments."
"Exactly. Moreover, I promised Governor MacLehose that after acquiring these plots, we would quickly develop them into new landmark buildings for Hong Kong, enhancing the city's skyline. That way, we'll earn both government trust and public goodwill."
"So has the Governor agreed to your condition?" Ma Shimin asked eagerly. If he agreed, it would mean Jardines Matheson could virtually acquire the plots risk-free.
Lin Haoran shook his head and said with a smile, "He didn't agree immediately, but I'm about 90% confident. Unless the Governor wants to see Hong Kong's property market crash immediately, he has no choice."
According to Lin Haoran's knowledge from his past life, although signs of a real estate collapse began appearing in mid-1981, the actual crash occurred on September 24, 1982. That day, the Iron Lady stumbled and fell as she exited the Great Hall of the People, exposing her setbacks during negotiations. From then on, Hong Kong's property market plummeted...
Now, it was only December 31, 1980—there was still a long way to go before September 24, 1982!
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