"Mr. Feng, we've settled HK$146 million worth of short positions, recovering HK$219 million in funds. But now no one else is willing to settle," the trader reported.
With less than an hour left before market close, Feng JinXi frowned.
"Only 1.46 billion settled? That's not even half," he muttered. It was far below expectations.
Li JiaCheng said: "The price is hovering around HK$2.7. Maybe investors expect a rebound. Settling at HK$3 strike doesn't satisfy them."
"Reasonable," Feng nodded. He turned to his partners: "I propose settling at HK$3.3. What do you think?"
"Five percent difference? Acceptable," Li calculated and agreed.
Niu BiJian and Bob whispered, then Niu said: "Release part first, not all."
"Fine. Put out HK$50 million worth, recover half the funds, then reassess," Feng ordered.
The trader placed settlement orders at HK$3.3.
Losing only 5% tempted counterparties. Many settled.
Minutes later, silence again.
By then, the alliance had closed HK$180 million worth of shorts, profiting HK$88.3 million, recovering HK$268.3 million. But HK$220 million remained unsettled.
"Mr. Feng, HK$20 million worth still hasn't traded," the trader reported.
"I see," Feng said grimly.
"Offer them at HK$3.5," he instructed.
The trader did so. No response. He tried HK$4, HK$5, even HK$6. Still no settlement. Clearly, longs were strong, convinced Hutchison's price would rise, refusing to close.
Since it was only HK$20 million, the others didn't object. But soon they too sensed something was wrong.
Feng said: "Gentlemen, our remaining counterparties are concentrated. They believe Hutchison will rise above HK$6. That's why they won't settle."
"Indeed," Niu nodded.
Li JiaCheng added gravely: "The price is HK$2.7. From here to HK$6 is huge. Yet longs refuse to settle even at breakeven. That means they're confident. This is HK$220 million at stake. With clear negative news and a crash, they still hold. If they don't know something, I don't believe it."
Feng speculated: "Do they think Hutchison's gold futures investment is profitable?"
"I checked with a Standard Chartered executive. Lin BaoCheng went long gold futures with USD 100 million, five‑times leverage. He's lost about half already," Niu said firmly. Otherwise, he wouldn't have dared short Hutchison with HK$120 million.
Li agreed: "Our investigation at Hutchison also confirmed longs. It shouldn't be wrong."
Feng insisted: "We must investigate further. This is HK$220 million. Their confidence must have reason. We need to know who the counterparty is, and whether Hutchison's investment is profit or loss. Spend more if needed. We must uncover the truth."
"If Hutchison actually profited, we must hedge immediately. Otherwise, when news breaks and the stock surges, each of us could lose over HK$100 million — maybe more."
"I'll handle the investigation. But the cost must be shared," Niu said. He admitted he hadn't dug deeper before, since prior checks already showed longs.
"Agreed," Feng said. "Don't fear expense. We must be 100% certain."
Li warned: "Even if we learn the truth, don't reveal it. Keep it hidden."
"Right. Truth mustn't leak," Bob agreed. If Hutchison had profited, their scheme failed. They'd need to hedge before the rebound, or face disaster.
"Let's just hope no bad news comes this weekend," Feng murmured. It was Friday, near close. With only suspicion, they couldn't hedge yet. Acting on mere doubt risked throwing away profits.
So they did nothing, praying no news broke before Monday.
Near close, Hutchison rebounded, pushing toward HK$3.
Feng's group didn't suppress it. Unsure of their short, they let it rise slightly.
At close, Hutchison finished just above HK$3, at HK$3.02. Market cap only HK$1.2 billion.
On paper, Li JiaCheng, Feng JinXi, Niu BiJian, and Bob had profited. But they weren't happy. They had celebrated too soon. With HK$220 million in shorts unsettled, and longs refusing even breakeven, their short bet hid enormous danger.