Why I was caught when the Asian financial crisis hit Hong Kong in 1997

We may have our failsafe programmes but we can't be sure whether it will work. Worse, we usually believe we are smart guys but the opposite is usually correct.

One afternoon in Dec 1997, the telephone rang and as no one else was around, I picked up the phone. It was a call from a friend who was still working with a bank at that time. He was the manager in charge of our bank accounts and as I was one of the directors, he said he wanted to see me but would like to tell me something beforehand. It was about some mortgage loans of which he thought I might have no idea because I had sold off my Hong Kong investments several months ago.

The next day I was in the meeting room of his office. Well, the same seaview and a bit boring to me. He came in with some files in his hands. 'Don't pretend you are all that busy', I thought. Then, he looked at me as if I were dead! You owed the bank XXX million dollars. Did I hear him correctly? Yes, I was liable under my personal guarantee for the debts of the companies ran by my family members and the bank would like me to pay the money as soon as possible. Bad luck! I knew what he would do next and began to understand why he thought I was dead!

My heart was beating strongly. Did I show fear? Did I show anger? Let me cool down first. I had to verify the debts, etc., with my family members and then I must review carefully my personal liabilities and of course, draw up a new personal balance sheet. My bottom line: I could still start all over again after discharging my personal liabilities. He indicated that the bank could transfer all the collaterals and debts to me if and when I paid everything in full.

So that was how I was caught by the financial crisis in 1997. The bank must look to me for repayment mainly because the bank knew I still had the money! Damn! I learnt why you must never never let any bank know your financial position. Bankruptcy was not an option when you still had the money!

'Give me a little time', I told this friendly bank manager. As expected, he gave me 7 days! As I walked out of his office, I knew exactly where I should go. My dear accountant!

We had everything stored in Excel and quickly we worked out a very rough outline. Yes, I could manage to discharge the debts and if the Hong Kong economy could recover in the next 6-12 months, I might be able to survive better with all the collaterals, etc. But it was not my character to give money away without a bargain! We worked out a brief proposal on payment by instalments and on the rights that I should get back including the transfer of all collaterals held by the bank.

The friendly bank manager called me the next day and we had another meeting this time with my dear accountant as well. I emphasized to him that my proposal was no admission of my personal liabilities and I was very prepared to fight a good battle with the bank. He also knew my bottomline. I could afford being declared bankrupt and losing the battle. I could still start all over again.

I guess you know his answer. Everything I proposed was acceptable but on condition that I must stay and work in Hong Kong as long as I still owed money to the bank. This was how the web of destiny caught me in 1997!

A few days later Christmas arrived. It was a very miserable time for me. I went to an outlying island of Hong Kong and was absolutely alone. All my hard work and all my dreams were gone! Gone, gone with the wind! I was mad and I ran out to the beach nearby. It was a cold windy night but the stars were bright. I looked at the sky with my angry tearful eyes and ran toward the sea to have a good swim!