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In 1979 the Hongkong and Shanghai Bank sold its roughly 22 percent stake in Hutchison Whampoa to Li Ka-shing's Cheung Kong for about HK$639 million, only part of it paid up front. The bank had acquired the stake by rescuing the struggling hong in 1975. The sale made Li the first Chinese to take control of one of the British trading houses that had dominated colonial Hong Kong's economy.
Control of a weakened incumbent company often passes through whoever rescued it, not through the open market. When a bank holds a bailout stake, it chooses the buyer based on trust, reputation and its own long-term relationship. An outsider can gain entry that a hostile bid could never win, and can often pay on easier terms than the market would offer.
During the 1967 leftist riots, many wealthy residents fled Hong Kong and property prices collapsed. Li Ka-shing used cash from his manufacturing business to buy land and buildings cheaply. When order returned and prices recovered, those holdings became the base of Cheung Kong's property empire, which listed in 1972.
Li Ka-shing went from refugee factory worker to plastics salesman to owner of a plastics maker. He grew it by adopting the plastic-flower technique early and producing the flowers cheaply for Western export markets. The steady cash from this low-glamour business, rather than outside capital, paid for his move into land, where the lasting wealth was made.