Rear Window In Hong Kong 

Eric Ellis, Hong Kong

07/02/1997

HANDOVER STANDOVER:  The partying that marked the world's biggest Chinese take-away is drawing to a close, after last night's massive karaoke party (pictured right) and Tuesday's departure of the Perfidious Poms.

Hotels are counting the cash windfall. Hotels ran at 90 per cent occupancy, not much more than a normal Hong Kong business day. The Cathay Pacific flight your columnist arrived on mid-week was just one-third full. That didn't stop hotels charging two to three times the normal room rates for accommodation they claimed a year ago must be booked and paid for in advance lest punters miss out.

Hotels like the three/four-star Century in Wanchai were typical. A room is normally an expensive $HK1,100-$HK1,200 (about $200) a night but the Australian management ratcheted the price up to a non-refundable $HK2,775.

Compounding the gouging were the $HK4 charges for a local call in a town where local calls are free and the $HK30 for a usually free "home direct call". Two 90-second calls to Sydney cost $HK170.

The moral of the story? Don't phone home.

DRES ORIENTATION

They say the most dangerous place in Hong Kong is any space between celebrity couturier David Tang and a TV camera. His Shanghai Tang boutique is sponsoring Friday as "Dress Chinese" Day, encouraging all to don cheongsams or mandarin coats and pretend they are auditioning for the Beijing Opera.

But if Hong Kongers truly want to fit in and look Chinese, they might invest in a pudding bowl haircut, Coke-bottle monochromatic sunglasses and a badly fitting grey suit, making sure the label is sewn to the outside of the cuff. And a vinyl briefcase.

Only then will they be indistinguishable from the gaping-mouthed comrade cadres arriving in Honkers this week, barely able to believe their good fortune.

ATMOSPHERIC

To get the authentic colonial feeling for the handover, Rear Window watched it from the dealing rooms of Jardine Fleming, the traders whose 19th-century drug-running inspired Britain's gunboat diplomacy in Honkers.

As Britannia pulled out from the HMS Tamar naval base, Rear Window settled down at the very desk occupied until May by one Rupert McCowan, the man whose "freelancing" in Papua New Guinea led to the Sandline mercenary debacle and the fall of the Chan government.

McCowan was sacked by Jardine Fleming for, er, overreaching his corporate advisory brief for the PNG Government with Sandline and the attempted Porgera buyback with Orogen Mining.

The telephone message system on Rupert's old desk was blinking - JF wags say they don't want to answer it lest it be from South Africa - and plastered around the desk were an Orogen prospectus and stickers in PNG's lingua franca, Tok Pidgin: "Mi Laik Baim Orogen."

ABSENTEE LANDLORDS

Question: How much private land and how many corporate enterprises did the Chinese officially seize control over on midnight, June 30?

Answer: probably very little land and few, if any, corporations.

Tax consultants who swung through Hong Kong in the months before the takeover noted that anyone owning land in the former territory was busy arranging for the land to be held by an offshore company.

The offshore company might be in the British Virgin Islands or Belize or almost anywhere but Hong Kong. Those who wanted more jurisdictional clout than the Bahamas or Malta (so that even the Chinese would hesitate before seizing the land) were arranging for holding companies in the US State of Delaware, which has notoriously loose company laws, combined with a New York address.

The private landholders were following the lead of major corporates. The Hong Kong Stock Exchange list shows few listed companies have their registered office in Hong Kong.

HOLED UP IN HK

You've just slipped out of Singapore after a little misunderstanding with your employer about what press reports describe as a $US30 million gap in a trust account. There are lots of good places in the world to go for some peace and tranquillity.

Hong Kong isn't one of them. This is partly because more than 8,000 journalists are in town desperately looking for a story.

This doesn't seem to have deterred former Merrill Lynch private banker Kevin Wallace from lobbing amid the pomp and parties of the handover.

While it's not still clear that American Wallace has actually done anything wrong, Merrill is giving a very good impression that something is seriously amiss at its Singapore office.

Wallace flew into Hong Kong at the weekend and checked into a hotel, where he was still registered last night.

Anxious to talk to Wallace about the gap in a trust account, Merrill Lynch has engaged Hong Kong lawyers and investigators to sift through the silk and taffeta remains of Hong Kong's five-day handover party to see if he shows up anywhere.

Merrill Lynch has obtained a Hong Kong court order that prohibits him from leaving town until Wallace "swears an affidavit of his global assets", with the new administration asked to mount a watch on airports and exit points.

Wallace was one of Merrill's gun operators in Singapore and his tight relationship with local tycoons, and particularly Indonesians who liked to park their cash in Singapore away from the Suharto regime, had been a big commission-earner.

PM EXPERIENCES A GRIPPING MOMENT

Prime Minister John Howard (above) watched the final countdown to the Hong Kong handover on TV monitors on the trading floor of the New York Stock Exchange.

Moments before, Howard's tour of the floor after giving a speech on China's future had coincided with the climax of an argument between two traders. Oblivious to the prime ministerial presence, one of them expressed a colourful view of the other trader's forebears and pastimes. Scandalised NYSE officials bundled the suspended trader out, poking at him with stock order forms.

Howard is pictured trying to extricate his hand from a close embrace with the chairman of the NYSE, Richard Grasso. The PM's old rival, Andrew Peacock, the Australian Ambassador, was getting up close and personal near Howard's back.

QUOTE OF THE DAY

"The good news is that bagpipes are finally out of Hong Kong and Kowloon."

Deputy Prime Minister Tim Fischer, reflecting on the handover.

FIRE BRIGADE

So who decided to bring the fire engine?

The advance guard of the People's Liberation Army which rolled into China's newest province on Monday night clearly was armed with mainland Mao watches rather than Hong Kong digitals, as they turned up half an hour early at the border, at 8.30pm rather than the agreed 9pm, sparking minor panic.

The PLA contingent consisted of 21 armoured cars and some 400 jeeps, buses and trucks loaded with 4,000 troops - and a red (what else?) fire truck. While celebrations were going like a bomb, it wasn't immediately clear where the PLA thought the conflagration was, particularly in the middle of heavy monsoon rains that dumped 100mm of rain on Hong Kong in two hours. The rocket launcher on the back of the fire engine also suggested a whole new approach to fire prevention.

DENGS IN FORCE

While Deng Xiaoping didn't make it to Honkers as he promised at the 1984 signing of the Joint Declaration, his wealthy family are there in numbers.

Deng's eldest son, Deng Pufang, and daughter Deng Rong arrived on Monday and they were joined by his other bizoid son, Deng Zhifang, his other daughter, Deng Nan, and widow Zhuo Lin, who flew in with Chinese President Jiang Zemin.

All the Deng children have "jumped into the sea" of business in some way, Deng Zhifang coming uncomfortably close to a State probe into a major corruption case.

The Deng daughters have done well from book publishing - thanks to a cheque written by Rupert Murdoch's book publishing division - and senior advisory roles for State corporations.