Kar Cheung Chong Bank (嘉彰莊銀行)

February 19, 2021 York Lo Articles, Banks and Finance, General, Hong Kong Companies, Non-Hong Kong Companies, People

York Lo: Kar Cheung Chong Bank (嘉彰莊銀行)

Founded in 1911 and operated out of the Nam Pak Hong district, Kar Cheung Chong Bank was a Chinese banking firm in HK and affiliate of Tan Peng Choon Banking Co in Thailand and Swatow which played a key role in the trade and remittance between HK, Swatow and Thailand for decades before its sudden collapse in 1955.

Tan Peng Choon Bank in Thailand

Advertisement for Tan Peng Choon Banking Co in 1947 listing its affiliates in Shanghai, Swatow, Canton, HK, Singapore, London and New York including Kar Cheung Chong. (70^th Anniversary of Kwong Siew Association in Bangkok)

Kar Cheung Chong was the HK affiliate of Tan Peng Choon Banking Co (陳炳春銀行), the regional Thai Chinese banking giant which traced its roots to Swatow and Bangkok in 1893 when it was founded by Tan Peng-choon (陳炳春) who also went by the name Chen Feng-yi (陳鳳毅, 1864-1939) and some of his descendants went by the Thai surname of Pengsangthong. A native of Chenghai, Peng-choon went to Thailand at an early age and set up Tan Peng Choon in Swatow and Bangkok to conduct remittance business between Chiuchow immigrants in Thailand and their native Chiuchow. These remittances were critical to the economy in Chiuchow in the early 20^th century as over 50% of its population were relying on them and by the 1940s, there were around 130 banks in the Chiuchow region that worked with over 450 banks controlled by Chiuchow natives in Southeast Asia handling over $100 million in annual remittance with Tan Peng Choon being one of the largest with branches in Singapore, Shanghai, Canton and HK and also working with Midland Bank in the UK and Irving Trust in the US. It was with this background that Tan Peng Choon established Kar Cheung Chong Bank (also known as Chan Kar Cheung Bank) in Hong Kong in 1911, and in that year, there were 58 remittance banks in Bangkok handing $7.8 million in remittance.

In the early 1930s, Tan Peng Choon Banking Co Ltd was incorporated and in 1934, it became the fourth commercial bank in Thailand. In 1936, Tan Peng Choon Bank and eight other Chinese banks including Wang Lee, Four Seas Communications (四海通銀行), Oversea Chinese Bank and Kwong Soon Lee (廣順利銀行) formed the Chinese Bankers Association in Bangkok. (Straits Times, 1936-10-7)

In the late 1930s, tensions were high in Thailand with the pro-Japanese military dictator Phibun shutting down Chinese schools, newspapers and businesses, while Thai Chinese sent money and supplies to China to support its war against Japanese aggression, some of these remittances being handled by Tan Peng Choon Bank.In August 1939, two assassins went to Tan Peng Choon Bank in Bangkok pretending to be customers and stabbed the 75-year-old Tan Peng-choon. He died soon after arriving at the Royal Hospital and his second son Tan Sek-lun (陳錫麟) immediately flew back from Singapore. (NYSP, 1939-8-16) Tan Sek-lun became convinced that the mastermind behind his father’s murder was HiaGuang-Iam (蟻光炎, Iamsuri, 1879-1939), the anti-Japanese chairman of the Chinese Chamber of Commerce in Thailand and arranged to have Hia shot to death in front of a theatre in November 1939. (NYSP, 1939-12-4) Tan was subsequently sent to jail for 18 years but was murdered in prison while his relatives continued to manage Tan Peng Choon Bank. By the 1950s, Tan Peng Choon Banking in Thailand was run by Tan Soo-sang (Commercial Directory for Thailand, 1953)

Kar Cheung Chong Bank in Hong Kong

Article about the 41^st anniversary celebration of Kar Cheung Chong in 1952 (WKYP, 1952-8-31)

After Tan Peng-choon’s death, Kar Cheung Chong in HK became wholly owned by Chan Hak-yeung (陳克讓, hereafter refer to as “H.Y. Chan”) by the early 1950s, making him allegedly the only individual to have 100% ownership of a bank in the world. Born in 1914, H.Y. Chan, presumably a relative of Tan Peng-choon, lived a luxury lifestyle in HKwith residence inShouson Hill and had four cars. He was a well-known figure in the horseracing circle and testimony in court after Kar Cheung Chong’s collapse in 1956 revealed that he spent a total of $91000 on horses in 1953, which included the payment of $25000 and $35000 for the horse “Jade” and “Skymaster” and the maintenance for his two other horses – “My Love” and “Popularity”. During the trial, he also claimed that his bets on horses were small, ranging from $30 to $1000-2000 to counter any rumors that the bank’s collapse was due to his racehorse betting. (KSDN, 1956-6-5)

In 1947, he invested HK$250,000 in Tai On Land Investment, a real estate development firm established by Leung Chik-fun and the other principals of Kwong On Bank (see article). In the late 1940s, Chan was supported at Kar Cheung Chong by Chang Kok-jin as manager, Tan Po-sin and PunKui-tai as assistant managers and Li Ting-chung as accountant.

In August 1952, Kar Cheung Chong Bank celebrated its 41^st anniversary at a large banquet hosted at the Kwong Chow restaurant that was attended by the who’s who from the banking, shipping, trading and insurance circles including representatives from HSBC, Mercantile, Chartered and French banks. (WKYP, 1952-8-31)

In 1953-55, H.Y. Chan invested $2.8 million in a mine in New Territories which turned out to be a bad deal. As it turned out, most of the funds were borrowed from Kar Cheung Chong. (WKYP, 1956-6-5)

Top: Headline of the collapse of Kar Cheung Chong Bank in May 1955 (TKP, 1955-5-14); Bottom: Kar Cheung Chong Bank at 66 Bonham Strand West in 1955

In May 1955, Kar Cheung Chong suddenly closed its doors and the accounting firm of F.S. Li & Co and the law firm Silva & Co were appointed as liquidators. The bank had bank deposits of $240,000 from around 1000 depositors, its properties worth around HK$200,000, liabilities of $2 million while it was owed $3 million, most of it by Chan. The same month, an underground bank by the name of Rajawongse Money Changers in Bangkok which was connected to Kar Cheung Chong closed its doors allegedly with liabilities of over US$1 million or HK$5.8 million based on the exchange rate at the time. (TKP, 1955-5-15)

In June 1955, F.S. Li & Co and Silva & Co organized a meeting for the creditors of Kar Cheung Chong at the State Theatre in North Point. (KSEN, 1955-6-13) The group voted 195 to 8 to support the re-opening of Kar Cheung Chong and and nominated Jebshun Shipping (as represented by barrister Lo Wing-kon), Ng Kwong-ting (吳光庭), Choi Yung-yee, Yeung Chi-lam and Tsui Fan to handle the re-opening. (NYSP, 1955-6-22)

In July 1955 however, five of the 900 creditors of Kar Cheung Chong who were owed HK$116,270 petitioned the High Court to liquidate the assets of the bank and H.Y. Chan and the court sided with them. (KSEN, 1955-7-16)By September, all the creditors changed theirdirector and decided to liquidate and go after H.Y. Chan over the $5 million owed by him and the bank. As a result, Chan was declared by the High Court in the same month (WKYP, 1955-9-26)

In March 1956, Kar Cheung Chong’s premises at 66 Bonham Strand West was auctioned off with starting bid at $220,000. It was won by Bangkok Mercantile (香泰貿易), the rice importing firm operated by the Sophopanich family of Bangkok Bank which operated across the street from Kar Cheung Chong, for HK$285,000, which translate to $200 per square feet. (TKP, 1956-3-22) The site was re-developed into Wing Shun Building in 1965.

In June 1956, Kar Cheung Chong’s license was revoked. (WKYP, 1956-6-9)Creditors had until the end of January 1958 to file for claims with the bankruptcy court. (WKYP, 1958-1-25)

While Kar Cheung Chong failed, two of its executives went on to successful business careers in Hong Kong. Li Ting-chung founded the Wing On Cheung group which was distributor of Yashica cameras in HK for many years and has also been involved in securities and property development. Another executive is Chan Chiu-hung (陳照鴻), the son of Chan Hak-tan (presumably related to Chan Hak-yeung) who was manager of bills at Kar Cheung Chong from 1950 to 1955 before joining HK Chinese Bank where he rose to become deputy general manager and later joining Allied Capital Resources (新聯財務), controlled by Filipino Chinese billionaire Lucio Tan, as managing director in 1981.

As for Tan Peng Choon Bank, it was taken over by Hakka tycoon KiatWattanavekin(丘細見, 1908-2013) and renamed Thai Development Bank (泰商銀行) in 1960. It was renamed again to First Bangkok City Bank in 1977 and was listed on the Stock Exchange of Thailand in 1987. After the financial crisis of 1997, it was absorbed by Krung Thai Bank. (Financial Sourcebook for Southeast Asia and HK)

Sources (other than those cited above):

http://nansha.schina.ust.hk/Article_DB/sites/default/files/pubs/Jour-02.2.A04.pdf

https://prabook.com/web/chiu-hung.chan/379119

http://app.lib.stu.edu.cn/qiaopi/editor/attached/file/20140428/%E6%9D%A8%E7%BE%A4%E7%86%99-%E8%BF%91%E4%BB%A3%E6%BD%AE%E6%B1%95%E4%BE%A8%E6%89%B9%E4%BA%94%E9%A1%B9%E9%87%8D%E8%A6%81%E7%BB%8F%E6%B5%8E%E4%BB%B7%E5%80%BC.PDF

http://www.chaorenwang.com/qiaopi1/content.asp?id=1032

This article was first posted on 19th February 2021.