If Fung King Hey weren't real, he would surely be a character in Noble House, James Clavell's epic novel of financial and political intrigue between British colonials and Chinese entrepreneurs in Hong Kong.

A poor boy from China and a one-time fish salesman, Fung, who is reportedly worth $1 billion (U.S.), is the head of a financial empire that includes the colony's most influential brokerage firm, Sun Hung Kai Securities Ltd. (SHK). He was propelled to the attention of the U.S. financial community last year through a deal in which he became the largest single stockholder in Merrill Lynch Pierce Fenner and Smith, with a potential shareholding of over $100 million. In return, Merrill Lynch obtained a 25 percent interest in his brokerage firm and a 15 percent interest in his Sun Hung Kai Bank.

Recently, the 60-year-old Fung again captured headlines when he announced plans to restructure his financial empire and to sell half of his 4 percent stake in Merrill Lynch. Even after the sale, he will still hold 2 percent of Merrill Lynch, worth about $60 million.

In a city where rumors and gossip play a large role because facts are hard to come by, brokers called Fung's stock sale and restructuring an expensive move to save face and bail out his troubled property company. They believed Fung was embarrassed that the property company's problems could "turn sour" the original deal with Merrill and the French banking group Banque Paribas, which also owns shares in the SHK group.

But Jack So, director of SHK securities, said Fung moved to shore up the real estate firm because of his belief that Hong Kong's prolonged property market slump eventually would end.

So also stressed that Fung decided to restructure his companies of his own volition and that "no party was under duress in this exercise."

The deal with Merrill Lynch gave Fung more stable U.S. stock just as Wall Street began its historic rise last summer, while Sun Hung Kai share prices dropped following Peking's announcement of its intention to reassert sovereignty over the territory when Britain's colonial lease expires in 1997.

Coming from a middle class Cantonese family, Fung never finished high school. After the Japanese invasion of China in the late 1930s, he worked at a dockyard in Hong Kong and as a money changer in Canton before trying to earn a living ferrying fish from Canton to Taiwan. But the venture failed because the fish died en route.

In 1967, when China's cultural revolution spilled over into Hong Kong and riots rocked the colony, Fung went to Canada. He returned in 1968, and the following year he set up his own stock brokerage company, Sun Hung Kai Securities.

The organization Fung established is one that is in many ways strikingly similar to Merrill Lynch. Brokers describe it as a "financial supermarket," providing a range of services including stockbroking, banking, property development, insurance, commodities and bullion trading.

As head of this empire, there's little doubt that Fung runs it "like a tough general," said Michel Barret, the managing director of Paribas.

However, the management of his companies has not been Fung's only concern.

In May, 1982, Fung and other prominent Hong Kong business figures visited Peking, where they discussed the colony's future with top Chinese leaders. Brokers here claim that upon his return to Hong Kong, Fung, along with the other businessmen, sold shares heavily on the stock market, helping to trigger the market's dramatic downturn last year.

But So, SHK's director, denied reports that Fung sold heavily. He said Fung was "quite bullish upon his return" from China and was encouraged by Peking's announcement that Hong Kong would be allowed to retain its life style.

He also claimed that Fung's decision to repatriate his stock-sale profits to Hong Kong is a vote of confidence in the colony's future.