IT could happen to James Choi Sai-leung, honorary chairman of Seapower International, on August 18. It could happen any day for a month after that. ''It'' is the exercise of a put option for shares and warrants in Seapower International held by some of the most powerful people in Hong Kong. The group can loosely be described as the ''Friends of Francis''. Francis is Francis Yuen Tin-fan - former chief executive of the stock exchange and a contemporary of Philip Tose and the founders of Peregrine Capital from Wardley and latterly Citicorp. He is also chairman of Seapower International. Mr Yuen's friends include Li Ka-shing, who owns nine per cent of Seapower International, Larry Yung of CITIC Pacific who owns three per cent and the Leung family, controllers of Kee Shing Holdings, which owns over 18 per cent. Mr Yuen himself controls 18.6 per cent of the company through a 51 per cent stake in a company with Peregrine as junior partner. The put option will allow this group to force Mr Choi to buy every share for $3.30 and every warrant for $2.08. The total cost to Mr Choi, presuming he failed to place shares out, would be around $550 million. Under the so-called chain trigger principle, Mr Choi would have to make a general offer for Seapower Resources, of which Seapower International owns 37.4 per cent and China Foods Holdings owns 20 per cent. The price would be determined from the percentage premium over net asset value paid in the option for Seapower International, about 25 per cent. This suggests Mr Choi would have to find a further $400 million. The board room row has already seen a series of court hearings and a Securities and Futures Commission (SFC) investigation into alleged share-trading malpractices at two subsidiaries of Seapower Resources. The main allegation is that a member of management used a company credit line to buy shares in the parent company. The allegations have been strongly denied by the individual claimed to be behind the moves. The SFC is expected to announce its own findings shortly. At stake is a family of companies which has grown well beyond its roots in property trading and cold storage. The involvement of Mr Yuen, who bought into Seapower International in early 1992, might suggest that the former corporate finance wizard had belatedly decided to rival Mr Tose and his former colleagues at Peregrine. But the boardroom row, the alleged irregularities and general change in market sentiment has ruled out a plan to spin off Seapower's financial services division by the end of this year. So what is it about the firm that has made Mr Yuen, a bridge player rather than a chess man, decide to fight so hard for control? There was a flurry of activity in November last year when Seapower Asia Investments bought into a Hong Kong insurance firm, which then poached the territory's top life insurance salesman and many of his juniors from National Mutual. But last week it was announced that the vehicle which Seapower shared with China Foods had been bought by Richard Li's Pacific Century Group. That deal scooped a tidy profit of around $600 million but it might well seem that a powerful string to Seapower's bow has gone. ''Remember, the Li family is friendly, the company is in friendly hands,'' is all that one source close to Seapower would say on the subject. The answer could lie in developing the firm's food business, along with mainland partners, China Foods Holdings. Food, say sources close to the company, is one consumer product the Chinese market is certainly ready for. New packaging, new marketing and new brands can quickly be established and even premium food-stuffs are within the reach of most people. Partnership with China Foods in Seapower Resources will hold the key to developments here. But another answer might be found by looking at moves afoot at Paramount Publishing Group, of which Seapower International owns 63 per cent. Paramount Publishing was, until January this year, known as Paramount Printing. The change of name speaks volumes. Sources close to Seapower point out that printing is a difficult business in Hong Kong. Investment in capital equipment is heavy. Paramount has perhaps $500 million of printing equipment but printing forms can probably only produce a return on assets of 10 per cent. Paramount is big by Hong Kong standards: certainly it is in the top four and quite probably number three. In the year ended March 31, it is likely to have turned in a small profit, somewhere around the $3 million mark. But larger profits and a far higher potential price-earnings ratio from investors will probably come from publishing magazines. Hong Kong is seen as a cultural centre for millions of Chinese, both on the mainland and in the rest of Southeast Asia. Publishing in the mainland is still fiercely guarded. One insider said: ''The [Chinese] Government will protect three things: ''the party, the People's Liberation Army, and the media. There won't be any freedom to publish for years and, even if it opened up tomorrow, there is no distribution system, no advertising agencies.'' Instead, Paramount is expanding through Asia leading off with two financial titles, Forbes and Capital. It does in fact have a mainland interest in the form of Modern magazine, but officially the firm's role is advisory. In two years, it is planned that the group will be deriving half its profit from publishing from around 40 per cent of turnover. But Paramount already has a strong chief executive in the form of Albert Cheng, and although Mr Yuen might like the investment arithmetic which Mr Cheng touts, it seems unlikely that he should want to be personally involved in the plans. Mr Yuen and Mr Choi are both banned by a board resolution from talking to the media as the company tries to keep the public focus off the firm's internal problems. Only when the row is settled, one way or another, will the company's future become clear. If Mr Yuen continues to be involved, it is a fair bet that corporate finance will be the focus and the current hiatus in the development of that business will pass.