Money Machine

Chapter 9Roller Coaster

While I was busy with Xiao Suining, the chief negotiator in Shenzhen, my colleague Au Ngai traveled to Taipei on February 12, hot on the trail of Zhou Lin, whom we had heard was there on a business trip. Au called to tell me that he had learned, almost as soon as he had landed, that Zhou was meeting with senior people from Chinatrust Commercial Bank, a Taiwanese institution, to buy the shares of SDB. So we really did have competition. Zhou had shifted his support from Newbridge to Chinatrust. We could only guess what had motivated him to make the switch—and we started to get the feeling that we were in for a ride that had more excitement than we had hoped for.

It was understandable that Chinatrust would seek control of a national bank in China. Since the early 1990s, many Taiwanese firms had invested billions of dollars on the mainland. For Taiwanese firms, the mainland market was both enormous—with its population of more than a billion people—and convenient, as Chinese on both sides of the Taiwan Strait speak Chinese and share a similar culture. Taiwan's own banking market was overcrowded, with more than 50 banks serving a population of about 20 million. As Taiwanese firms built their businesses on the mainland, Taiwanese banks wanted to follow their clients, in addition to tapping into the vast potential there.

In addition to the entrance of Chinatrust was even more unsettling news. Back in Shenzhen, we heard that we were being discredited by malicious ...