What's wrong with me being a rich man?

Chapter 461 The incident happened
Liu Wanying's return means that the attack on Renault by the mountain peak is imminent.

She flew in from Singapore and could have gone directly to Hong Kong to facilitate the operation of funds, but she wanted to have a face-to-face meeting with Yu Xing and also wanted to relax her tense nerves before launching the operation.

This time, Guoshanfeng is going to invest all its funds, which will inevitably cause a great deal of turmoil. Although it has been proven that the car company has cheated on emissions, she is still worried about whether the whole process can withstand the pressure of supervision.

More importantly, the second round of attacks targeted Volkswagen vehicles listed in Germany. Although both are EU member states, Germany has stricter regulations and will inevitably strengthen oversight after the first round of attacks.

In 2010, Germany took the lead in banning naked short selling of stocks, Eurozone government bonds, and CDS of 10 financial institutions. To this end, it joined France and Belgium in investigating structured naked short selling by investment banks such as Goldman Sachs and Morgan Stanley, freezing more than $1 million in funds.

Previously, a British hedge fund used a long-short manipulation strategy through its Cyprus subsidiary to short a target, and its €3.2 million assets in Europe were frozen in coordination.

Liu Wanying had not mentioned these matters on the phone before, but today, upon arriving in Lingang, she described the pressures she faced during this operation in Europe in a rather serious manner.

"So, how do you think the European market compares to the Japanese market?" Yu Xing asked.

“Europe faces greater regulatory pressure, while the Japanese market is conservative and has never provided much room for short selling from the beginning. Europe is different, and their regulators are correspondingly more experienced,” Liu Wanying explained.

Yu Xing nodded and asked with interest, "So how are you going to show off your skills?"

Liu Wanying glanced at Boss Yu. After all that talk, he didn't seem to feel any pressure; on the contrary, he seemed quite enthusiastic.

She held her teacup and said calmly, "If the short selling doesn't go well this time, Red Falcon Capital absolutely cannot invest in your machine learning foundation."

Yu Xing: "..."

He sighed: "Look at you guys, machine learning has potential. I originally wanted to take Yu Kai to Shenzhen, hoping to get the favor of the giants, but after calling and asking, they weren't interested at all, so I didn't bother anymore."

Yu Xing stretched his arms and shook his head, saying, "On the contrary, Amazon... I asked Jim, the director of Facebook, to ask his friends at Amazon to see if they could sponsor some cloud computing projects. Surprisingly, it went quite smoothly. Yu Kai was helpless when he heard this news. Mr. Liu, we can't let them have all the glory."

"Your foundation is going to be open source, so it's normal for Amazon to provide some sponsorship, isn't it?" Liu Wanying remained unmoved. "Anyway, Red Falcon's actions depend on the outcome of this short selling. Um, regarding the allocation of funds, I'm going to..."

Yu Xing waved his hand: "You've never talked to me about these things in detail before, why are you doing it now? No need to say anything, how could I not trust you?"

“This involves $3 million, so we need to make things clear,” Liu Wanying said earnestly.

Yu Xing nodded: "Okay."

Looking at his posture, Liu Wanying suddenly felt a surge of anger and said, "What's wrong with you? If you're going to trust people, then carry it out to the end. I just said something casually, and you want me to explain it clearly!"

"I'm not a servant," Yu Xing said innocently, spreading his hands. "I'm your partner. If my partner speaks up, I'll just listen. Maybe I can offer some help."

Liu Wanying was satisfied with this explanation. However, she had already consulted with different European law firms and funds under different identities for a fee regarding the transfer of funds and risk isolation. Combined with her experience over the past few years, she was quite confident in the process.

Because Renault's free float is not high, it will inevitably use CDS derivatives to leverage more funds to get past the peak.

The strategy of "over the peak" involves splitting funds into three parts: 3% for shorting stocks, 3% for credit default swaps (CDS), and 4% for over-the-counter forwards. These three types of instruments are operated in different markets, namely the exchange, the interbank market, and the OTC market. This makes it difficult for the regulatory system to quickly identify the overall short position by linking these instruments across different markets.

Furthermore, the real-time data sharing between German BaFin and French AMF only covers 50% of transaction data. This information exchange agreement between regulatory agencies, which has not yet been fully implemented in the EU, has also become a detail that Guoshanfeng exploits.

As for the non-penetrating setup, this is a common practice. As the scale of funds increases, Liu Wanying uses bearer shares and nominee shareholding through a Panamanian law firm. Since Panama has not yet signed the FATCA agreement, this can effectively hinder the penetrating verification of the fund flow.

"Unfortunately, Panama says they're about to sign the agreement, so things aren't so safe in the future."

Liu Wanying spoke at length, and then mentioned the subsequent changes with some regret.

Yu Xing listened with great interest and asked a question: "Since you have quite a variety of methods, what about that hedge fund whose funds were frozen that you mentioned earlier? Didn't they try to circumvent it?"

“The EU’s ban on naked short selling is only a recent development, and many regulatory provisions have changed quite a bit,” Liu Wanying pondered. “The cat has evolved, and the mouse, without constant study, has indeed become complacent. This time, with the return of profits to the supply chain, I will also do some cryptocurrency trading, but the overall trading volume of cryptocurrencies is not that large; I can manage about 20%.”

The EU has been tightening regulations on financial markets, which is a concern that may arise in the next phase of the process.

She said with some emotion, "I didn't think cryptocurrency had much of a future, but in the last two years, there has been a strong demand in the market. Some of the funds from Guoshanfeng will be transferred from the offshore account to Credit Suisse's Hong Kong branch, and then to the London headquarters. This kind of internal transfer between cross-border branches does not trigger SWIFT messages now, but we don't know when this path will be blocked."

SWIFT is an international fund clearing system. Credit Suisse acted as market maker for the mountain peak, purchasing over-the-counter put options. The payment of the premium was hidden by following this loophole.

"Therefore, Liu Jiankai's attempt to set up a cryptocurrency exchange in Hong Kong will likely face a lot of regulatory pressure and will not be easy."

Liu Wanying was reminded of Liu Jiankai, who had ventured into cryptocurrency, through an unconventional and clandestine approach.

Yu Xing thought about Liu Ge, who had been silent since going to Hong Kong, and shook his head, saying, "He's very determined, but I don't know when he'll be able to get listed on the exchange. We haven't been in contact recently."

"In short, Guoshanfeng has gone all in this time," Liu Wanying said solemnly. "If Renault is suspended from trading or protected by the authorities, and the principal and profits are not recovered, Volkswagen may not be able to launch a second round of attacks."

This kind of thing happened before when shorting Mitsubishi in Japan, and there are similar suspension regulations in Europe. Although this practice is not common... it is indeed rare for a car company like Renault to commit emissions fraud.

Yu Xing smiled slightly: "Then we'll have to wait and see. Renault's collapse alone may not necessarily trigger a major investigation in the automotive industry."

If one company engages in counterfeiting, it may only be one company at a time. But if a second company appears in a short period of time, then trust will inevitably collapse.

Liu Wanying walked to the window of the president's office, looked at the prototype car parked quietly outside, and said slowly, "I was thinking about this on the plane back. What do you think the executives at Volkswagen who led and participated in the fraud will think when Renault has problems?"

Yu Xing's thoughts raced, and he suddenly had a brilliant idea: "Renault is going to crash, so we can't short Renault in time. Will those who know the inside story immediately switch to shorting Volkswagen, which they themselves participated in the fraud?"

Liu Wanying turned around in astonishment: "You really don't hesitate to assume the worst."

"Just thinking about it, we can also ask the media to create this possibility later," Yu Xing said with a smile. "Speaking of which, the Carbon Silicon Group is still in contact with some middle and senior management at Volkswagen. We think Zhang Yang from Volkswagen's powertrain R&D department is quite capable. Well, he's a senior manager, but he's not very interested in our invitation yet."

Besides those working on powertrain systems, Su Weiming, Volkswagen's sales boss in China, is also a recent candidate contacted by Silicon Carbon Group, with the aim of building a sales system to begin in the second half of the year.

Liu Wanying commented, "You're reaping profits from stocks and also reaping talent. Your ability to remain anonymous is truly excellent."

If Shan Feng hadn't concealed his identity, at least someone like him, the target of such an attack, would likely find it emotionally difficult to accept the invitation. "I just want to pull them out of this quagmire," Yu Xing said with a smile. "President Liu, please stir up some trouble and create turmoil."

Liu Wanying readily agreed.

……

Zhang Yang, a senior manager in Volkswagen's powertrain R&D department, has been quite annoyed lately because that Lingang-based silicon carbon group keeps sending headhunters to call him.

That's not all; she even asked some friends in the industry to persuade her to join the new energy business.

New energy may have a future, but how much of a future does new energy have in China is a question.

Or rather, this is a judgment.

Zhang Yang wasn't very familiar with the situation of Silicon Carbon Group, only knowing that it was a new energy company that focused on range-extended electric vehicles. However, one of his colleagues had been poached by LeEco before the Spring Festival, supposedly to work on the research and development of pure electric vehicles.

Because of their good relationship, Zhang Yang occasionally talked to the other party on the phone, and they inevitably talked about each other's work. He felt that... it was hard to evaluate. LeEco, an internet company that just shouts slogans, was really too unrealistic.

During the May Day holiday, Zhang Yang, who was on vacation, received another call from his old colleague.

This time, he expressed his firm stance: "Old Liu, let me make this clear to you, I will absolutely not join the Silicon Carbon Group! I have absolutely no interest in it! Moreover, I have a very good future at Volkswagen, why would I go to a car company that runs around making range-extended vehicles in Lingang?"

"Even if, I mean even if, they make a pure electric car?"

Can range-extended vehicles be called new energy vehicles?

"Old Liu, I met with the top boss last month, Horst, who is in charge of the group's technology development. We talked for a long time, and I'll say it without being too modest: I think I can still make a name for myself within the Volkswagen Group!"

"OK, I've made myself clear. You don't need to talk to me about this anymore. Also, please tell the Silicon Carbon Group that unless I'm fired, I will never leave Volkswagen."

After being harassed multiple times, Zhang Yang finally disregarded the feelings of his former colleagues and spoke out about the matter clearly.

The phone call ended, and the world was quiet again.

Many key personnel and middle managers at Volkswagen are in a similar situation to Zhang Yang, including Su Weiming, the sales chairman of Volkswagen China. He also received an invitation from Silicon Carbon Group, but the person who called was Cui Zhiyu, a higher-ranking vice president.

Unlike Zhang Yang, Su Weiming wasn't angry. He just found it both funny and absurd: "President Cui, are you trying to poach me? President Cui, I'm Su Weiming. We've met before. Are you sure you want to poach me?"

He was quite surprised.

Cui Zhiyu was actually a little embarrassed to make this call... how should I put it, but the silicon carbon industry had found a new batch of talent, so this task was assigned to him. Even though there was little hope, he still took action.

Faced with President Su's teasing, he could only try his best to express his approval and goodwill.

Su Weiming listened patiently and then laughed, "President Cui, have President Yu call me next time. I hope to see your range-extended vehicles soon. I wish you all the best."

Before Cui Zhiyu could speak, he heard the busy tone on the phone, so he could only put down his phone and silently wish everyone all the best.

Ah, the halo of the Volkswagen Group is truly dazzling.

……

May 2nd, 4 PM in Tokyo.

Carlos Ghosn, the head of the newly formed Renault-Mitsubishi-Nissan automotive alliance, is giving a live interview to TV Tokyo, where he spoke confidently about this year's revenue growth and mentioned that the alliance's goal is to become the world's largest automotive alliance.

"Mr. Ghosn, could you tell us about your business philosophy?" the host asked with a tone of admiration.

Ghosn, who successfully brought Mitsubishi into the automotive alliance, is enjoying immense success this year and is now sought after by major Japanese companies, who are eager to study his business operations and management philosophy.

With his chin raised, Ghosn spoke to the camera about his philosophy: focusing on results, reducing costs, and strengthening marketing—a philosophy completely different from the Japanese approach of the past.

However, as he was speaking eloquently, a subtle commotion arose from the crowd off-camera.

Less than two minutes later, the host, who was conducting the interview, listened to the voice in his earpiece and his expression turned strange. He gently reminded the head of the Auto Union.

Ghosn was somewhat dissatisfied and gave the host a displeased look.

Hearing the change in his earpiece, the host took a breath and had to ask the latest question: "Mr. Ghosn, the Peak Research Institute released an investigation report concluding that Renault has emissions problems. What is your opinion on this?"

Ghosn understood what he meant, but precisely because he understood, he asked incredulously, "What? What did you say?!"

The host briefly asked, "Short sellers have accused Renault of emissions fraud. Mr. Ghosn, what is your opinion?"

Ghosn's previously composed expression changed abruptly with the repeated phrase.

He knew exactly who Guo Shanfeng was!
The reason it was able to acquire Mitsubishi through a combination of persuasion and coercion was precisely by taking advantage of the opportunity to short Mitsubishi during a period of high volatility. But it never expected that this time it would target Renault...

Ghosn stood frozen in place on camera, not answering the host's questions for a long time, while off-screen voices could be heard, including inquiries from Nissan executives who were with him.

Ghosn made no movement and no sound.

This forced a Nissan executive to step into the frame and grab the CEO's arm.

It was only then that Ghosn came to his senses, hastily uttered a single sentence, and ended his lecture on his business philosophy.

"Renault is innocent!"

(End of this chapter)