Ho Hong Bank - Ho Hong's Roots: The Chinese Commercial Bank

Ho Hong's Roots: The Chinese Commercial Bank

The founders of Ho Hong Bank were Lim Peng Siang, Dr. Lim Boon Keng and Seow Poh Leng, all of whom were, before that time, officers of the Chinese Commercial Bank.

The Chinese Commercial Bank, founded with a paid up capital of $1 million in 1912 by Dr. Lim Boon Keng, Lim Peng Siang, Lee Choon Guan, Tan Cheng Siong and others, had experienced a run on the bank which forced its closure just two years after it began business. Dr. Lim Boon Keng arranged an interview with Sir Arthur Henderson Young (1854-1938), Governor of the Straits Settlements. Before the interview, Seow Poh Leng was called on to produce a balance sheet within 48 hours, which he did until he fell from sheer exhaustion. Following the interview and review of the Bank's balance sheet, Sir Arthur ordered the following proclamation:

"The Government has undertaken to look into the position of the Chinese Commercial Bank with a view to lending it money, but before doing this the Government must examine the Bank's accounts and during this examination the Bank will be closed."

Two weeks later the Government made another proclamation:

"The Government has examined thoroughly the accounts of the Chinese Commercial Bank, and finds that its assets exceed the liabilities. The present trouble is due partly to the fact that many traders are hoarding their money instead of paying it into the Bank. If the Bank is able within a reasonable time to raise cash, Government will certainly lend it a sum of money equal to the amount so raised"

Although the Bank was quickly reopened on 1 October 1914, and public confidence restored, due to complaints from Tan Cheng Siong and other shareholders, Lim Peng Siang resigned.

In 1917, together with Dr. Lim Boon Keng and Seow Poh Leng, he set up the Ho Hong Bank with a capital of $3.5 million (£40406,976 half of which was paid-up) which grew to $4 million (£465,116 fully paid-up) by 1920 and over $6 million by 1931. Lim Peng Siang became the Chairman of the new Bank with Lim Peng Mau as Managing Director, Seow Poh Leng as General Manager and Secretary, Mah Kee Keng as Head of The Business Department, Tan Eng Hin as Manager of the Malacca Branch and Tan Chin Tah as Sub Manager of the Muar Branch.