Those Years When I Was Forced to Top the Forbes List

Chapter 220 I need a license plate!

Later that evening, when Chen Xuebing made the call, it was Lao Kan's wife who answered.

Old Kan was invited to dinner at the Shanghai Hotel by Shenzhen Economic Investigation officers. He had a bad feeling on the way there, and when he arrived, he was taken to the Shanghai Economic Investigation Corps.

Before going to the Economic Crime Investigation Division, he was allowed to make phone calls in front of them. He made one call to his wife, one call to himself, and it's unknown who else he called.

One thing is certain: he's in Shanghai, already at the detention center, and they sent Mr. Kan's wife to pick up his personal belongings.

In other words, they were taken directly to the detention center without even a chance to be questioned.

Chen Xuebing received these messages and notified Hefei to remove the information containing Lao Kan's name from BOE's online reports.

When Leader Huang came in after the meeting, he waved to Chen Xuebing, who had stood up.

"No need to say more, I've already inquired about the situation. It's about Southern Securities, manipulating the stock prices of Harbin Pharmaceutical Group and Harbin Aircraft Industry Group. He has to bear leadership responsibility. He's currently in Shanghai and will be taken to Shenzhen tomorrow morning."

Chen Xuebing paused for a moment.

"He told me about this. The peak period for buying Shuangha was after he left the company. Could you please have someone investigate? At least do some investigation before handcuffing him?"

"How do you know they didn't investigate?" Director Huang asked rhetorically.

“The parties involved haven’t been questioned, so let’s investigate.” Chen Xuebing still tucked the word “Mao” at the end of his sentence.

After thinking for a moment, he added, "If we go to Shenzhen, then the leaders won't be able to handle this?"

He came specifically to ask Leader Huang for help because he was in Shanghai.

He was just "chased" back by business tycoons in Shanghai, and he really had no connections there.

"This isn't about finding a solution; the key is whether he actually did it!" Leader Huang rebuked.

Chen Xuebing chuckled dryly upon hearing this.

Let's leave everything unsaid.

Leader Huang paused for a moment, knowing that these words wouldn't intimidate Chen Xuebing. After considering it for a while, he said, "Shenzhen or Shanghai is fine. I can ask someone to bring up the procedural matters. There's really no need to keep him in a detention center before the procuratorate has filed charges and the court has delivered its verdict. Let's see if we can get him medical parole. Is he crazy?"

This last sentence, in normal circumstances, would be an insult.

But when Chen Xuebing heard this, he immediately chuckled and said, "You're sick. At your age, you must be sick."

When Leader Huang saw Chen Xuebing's change of expression, he scoffed.

He then rummaged through the drawers of his desk, took out several documents, and threw them on the table.

"Look, help me get this done, and I'll help you."

The words spoken this time were just as straightforward and direct as last time, and Chen Xuebing thought this directness was quite good.

When dealing with urgent matters, being straightforward will save everyone trouble.

Anything that Boss Huang keeps in his drawer at any time must be something he cares about.

Chen Xuebing picked up a few documents and flipped through them briefly.

Speech at the Fourth Session of the Tenth Zhejiang Provincial People's Congress, 2006

The section marked in red mainly discusses the adjustment of industrial structure ratios. In areas such as municipal administration and logistics, local governments and private capital establish joint ventures to take over the debts of small and medium-sized enterprises and gradually repay the debts through franchising.

Below that is the National Development and Reform Commission's "Bi-monthly Reform" report, which also guides small and medium-sized enterprises in clearing their debts.

The following documents are similar; the underlined ones contain guidance and suggestions related to debt relief for small and medium-sized enterprises, as well as some content on financial risk prevention and social stability mechanisms.

Chen Xuebing seemed to have viewed the documents in the wrong order; the last document was a signing agreement between Chongqing and ICBC.

This refers to the previous contract signed by Chongqing to dispose of ICBC's non-performing assets in a package with a recovery rate of 18%.

For 28 billion yuan, they bought a 157 billion yuan corporate debt package from ICBC, including more than 90 billion yuan in principal and more than 60 billion yuan in interest.

This document is very thick, and the red lines inside are drawn directly on the table of contents.

It concerns the section on "enterprises with annual revenue of less than 400 million yuan and fewer than 1,000 employees".

This refers to the upper limit for "small and medium-sized enterprises" set by the State Economic and Trade Commission in 2003.

After reading the previous documents, Chen Xuebing roughly understood what Leader Huang meant.

This is to ask him to help with this part.

He glanced at the overview and then asked:
"The debt of small and medium-sized enterprises is 33.25 billion yuan. Leader Huang, what would you like us to do?"

“We have come up with more than one solution, but the one I favor the most is for you to cooperate with Yufu. The government will contribute this part of the debt as a 49% equity stake to establish a joint venture with you. You will then guide private capital to raise 500 million yuan, select companies with growth potential for loans or equity support, and enable them to repay their debts. We will extract the high-quality assets from those companies that have no hope and dissolve and close them down.”

Upon hearing this, Chen Xuebing immediately reviewed the contract again.

Goodness, 127 companies.

No wonder Yufu Group specifically separated this part; with so many companies, just the process of screening them would be exhausting.

Chen Xuebing said speechlessly, "Why don't you just sue all these companies at once and divest their assets directly? 33.25 billion. You should be able to recover at least two or three hundred million, right?"

His words were a clear statement: this bad debt is not worth 500 million at all.

“It’s not as bad as you think,” said Director Huang. “We filtered out the debts when we bought them. These are bad debts, not dead debts. These companies are not bankrupt; they are all operating. Moreover, the bank loans are secured by collateral. A few years ago, the collateral was worth 90 billion yuan. Think about how much it is worth now. Half of the collateral is land. If it weren’t for the tens of thousands of employees working in these companies, we wouldn’t be able to forcibly remove the assets. This job would never have been yours.”

Chen Xuebing immediately shook his head, denying this claim:
"Even if half of it is land assets, they are all disputed. With a total principal of over 90 billion yuan, how many years has it taken to get 60 billion yuan in interest from ICBC? At least six years, right? Didn't they borrow money elsewhere during that time? There must be a ton of creditors. Even the banks can't collect these debts, and you want me to use investors' money to lend and support them? Can these companies make a profit? Even if they do, how long will it take? Can investors afford to wait? Mr. Huang, my fund relies on its reputation for high returns. I really can't do this job. If I do it once, my reputation will be ruined, and I'll lose my financing ability. This is cutting off my escape route."

The more he thought about it, the more unreliable it seemed. The most valuable part of this debt was the large corporate portion. There were few targets, so it could be restructured, and the land assets were concentrated. Just by divesting the land, he could make a fortune.

The 127 companies are just a small part of the land resources that were forcibly separated from them, and they are scattered.

What can it be used for?
Opening a chain of supermarkets?

Some are still in industrial areas.

We also need to resettle the workers; just thinking about it gives me a headache.

Seeing Chen Xuebing's resolute attitude, Leader Huang frowned and said, "Then you can take it. We won't use any social capital. We'll give you a loan to buy those debts. You can sell them or merge and restructure them, but you have to properly resettle those laid-off workers. Is that okay?"

Chen Xuebing was stunned for a moment.

This tactic... why does it sound so familiar?

A package of state-owned assets?

In the 90s, large state-owned enterprises were reformed, while small state-owned enterprises were privatized or closed down. Selling them one by one was too troublesome and would involve picking and choosing. So, these small and medium-sized state-owned enterprises that could be privatized were packaged together and sold together, with the good and the bad mixed together. The acquiring companies then handled the compensation and resettlement of laid-off employees.

After that, small state-owned enterprises almost disappeared.

Many mainland tycoons started their fortunes here, and a considerable amount of Hong Kong and international capital also participated in this massive consolidation and restructuring activity, reaping substantial profits.

but
"Leader Huang, at least the state-owned assets package back then included some high-quality enterprises. Yours is full of highly indebted companies, and you want me to spend money to buy them? You want me to resettle and compensate the employees? I think you'll have to compensate me several hundred million yuan, won't you?"

“I already told you there are collateral assets inside! Half of them are land! These companies aren’t the state-owned enterprises they used to be! Many of the owners are desperately trying to survive! I’m giving them to you so you can use market-based methods to revitalize them as much as possible, not to let them all go bankrupt! If that’s how you understand it, then you’re not up to the task! You can leave now!”

Leader Huang roared angrily.

A long silence fell over the office.

Chen Xuebing didn't answer, but picked up the documents in his hand and carefully reviewed them again.

This time, I watched it for a long time.

Leader Huang didn't say anything, but waited patiently. Even when it got a little dark, he didn't turn on the lights.

Traditional small household appliances, textiles, retail department stores, building materials, hardware, cables, snacks, and agricultural planting.
Chen Xuebing read it at a rate of about one page every half minute.

They are called small and medium-sized enterprises, but they are basically small businesses with only a few dozen or a hundred employees.

The collateral and the business situation are not as bad as they seem.

However, some products have a cycle, and if a company's situation deteriorates for a while during that period, and it borrows too much money, it is easy to run into cash flow problems.

About half an hour later, Chen Xuebing cleared his throat and, while looking at the last few pages of the document, began to speak:

"At least half of the companies are no longer viable. There are about 20 or 30 companies that have a good chance of success. As for the remaining companies, we need to take a look at them in person."

From his perspective as a time traveler, some companies can be saved by one or two popular products, while others are short of money and need to improve their supply channels.

A smile appeared on Leader Huang's face.

Because Chen Xuebing's view was more optimistic than theirs.

"If you are willing to take on the part of the assets that you decide to pursue through legal proceedings, the municipal government can help you simplify the procedures and file a large number of lawsuits at once."

Chen Xuebing hesitated instead.

This kind of decree isn't something you can just issue on a whim. Some companies you've never even met, and you're telling them to die? They really can't bring themselves to do that.

The key question is, how can we effectively manage such a complex range of products?
咝.
He suddenly had an idea.

supermarket!

Then, another idea came to mind.

license!

These two thoughts came one after another, sending a chill down his spine.

A little excited.

"Ahem." Chen Xuebing cleared his throat again, suppressing his excitement. He calmly got up, turned on the light, and then, with a furrowed brow, turned to ask, "Leader Huang, how much are you planning to sell me this debt for?"

Leader Huang raised his hand and made a "five" gesture.

Chen Xuebing shook his head decisively and held up three fingers. "At most three hundred million, and you have to agree to three conditions."

Leader Huang shook his head even more firmly: "At least five hundred million. You can name your terms."

“I’m not haggling. I’ll try my best to revitalize these companies with 300 million yuan, but I can’t fully guarantee employee benefits. After all, there are some bad companies. I’m willing to pay to acquire their remaining value, but the business owners are unwilling to use that money to compensate their employees. This isn’t an acquisition of companies; it’s a debt-for-equity swap. I can’t possibly pay for it myself.”

As soon as he finished speaking, Leader Huang slammed his hand on the table.

“If such a situation occurs, you should distribute it directly to the employees! Anyone who dares to refuse, disrupts social stability, or disregards the interests of the people, should be arrested! I have said before that restructuring must be led by a powerful party! You are in charge of this matter!”

Chen Xuebing raised his eyebrows.

People really do talk wildly these days.

He didn't want to waste any more time, so he sat down again and made a "four" gesture.

"That's all. Also, the government needs to give me an 800 million loan. I don't have the money on hand, so I definitely can't handle this."

Four hundred million was already Huang's bottom line, but he could not accept a loan of eight hundred million.

"How can you shoulder an 800 million loan? Even if we inject this debt package into you, the bank can only lend you a maximum of 500 million."

Chen Xuebing, however, refused to back down: "At least 800 million, of which 400 million should go to the government to deal with this debt package. 300 million is not enough, is it? In addition, I was planning to borrow 150 million recently. If we drag on such a high debt, I will not be able to get loans from other banks. We can't give up our own development because of this, can we?"

After a moment's thought, Director Huang asked, "Your financial company can get a loan of 150 million from a bank? What kind of collateral do you offer?"

Chen Xuebing gave a dry laugh.

"Our No. 1 Fund started with 1.55 million yuan, of which a portion was our own capital. The comprehensive return is 43%, which has now almost doubled. Our own capital is close to 100 million yuan. In addition, my construction company and Shenzhen technology company make a monthly profit of six to seven million yuan. It shouldn't be difficult for us to borrow this amount of money, right?"

He wasn't exaggerating at all.

He originally planned to borrow 100 million yuan using the financial company's own funds, and then borrow another amount later when Qidian Technology developed. However, with this large loan being injected, it will probably be difficult for Qidian Technology, which is related to it, to get another loan.

This revelation startled Leader Huang.

"You've only had your fund registered for a few months? How have you made so much money?"

"Hehe, I invited Chairman He out today with the intention of making some money for Yufu Capital. For future fund transactions, I plan to cooperate with Southwest Securities. Also, the city's guiding funds haven't been paid out yet, right? I suggested borrowing 200 million yuan from him and depositing it into Southwest Securities' account for us to use for stock trading. The securities company will supervise it, and I'll give him 5% interest after three months. It's a business that makes money for free, but he still won't do it."

Two hundred million, three months, ten million in interest.

Leader Huang took two cigarettes from the cigarette box on the table, handed one to Chen Xuebing, lit it, and took a couple of puffs.

After thinking quietly for a while, he stubbed out his cigarette in the ashtray.

"I'll talk to the bank. If your assessment shows you really have that many assets, they should be able to lend you 700 million. You can also get that 200 million loan you want, but the money can only stay in the securities company's account. You can only operate with it, and you can't withdraw it even if you make a profit before the settlement."

Chen Xuebing smiled.

I knew this old shrewd businessman would succumb to temptation.

He got the answer he wanted, but he remained as steady as a mountain.

"Okay, but I have one condition."

Leader Huang raised his hand: "Go ahead."

"I need a license, a trust license." Chen Xuebing clenched his fist as he said this, and began to get a little nervous.

"Trust?" Leader Huang raised his head, thought for a moment about what a trust license was, and then asked, "What do you need a trust license for?"

“Trust can raise funds and make loans! I only have a fund license now, how can I lend money to those companies? Am I supposed to engage in private lending? With 33 billion yuan in debt and 127 companies, I don’t know how many loans I would have to make. I dare not joke about it.”

Chen Xuebing spoke with righteous indignation, but in his heart he was making a crazy calculation.

A trust license, that's something that can fetch tens or even hundreds of billions of dollars in a few years.

In another year, the government will stop issuing them; they'll be discontinued.

Trust licenses are touted as licenses covering the entire financial sector, also known as "shadow banking" licenses, and in reality, they offer more benefits than banking licenses.

It can attract funds at a fixed interest rate without requiring dividends, just like a bank, except that the interest rate is generally higher than that of a bank.

They can issue loans, and the requirements are lower than those of banks.

You can raise funds for your affiliated companies (provided there is a legitimate business reason and regulatory filing).

Banks cannot invest in the real economy, private equity funds can only invest in stocks and equity, but trust licenses have no restrictions at all. They can invest in almost anything, including asset securitization products, investing in a phase of a real estate project, and even packaging artworks into a product to sell.

Not to mention some non-standard financing that involves minor irregularities.

The investment scope spans currency, finance, and real estate markets.

In short: flexible.

In 2007, the China Banking Regulatory Commission (CBRC) rectified the trust industry, making it clear that no new trust licenses would be issued, and the number of trust licenses nationwide was fixed at 68.

Subsequently, restrictions on the trust industry were relaxed, and with the gradual increase in real estate demand, the capabilities of trusts began to be known to many people.

This thing isn't getting much attention right now, but in a few years, it will be a symbol of strength. Most of the licenses are held by large state-owned enterprises. In the eyes of investors, trust products are a sign of "rigid redemption," with abundant resources, strong credit, and the ability to establish family trusts. Of course, connections will naturally come to them.

Chen Xuebing wasn't quite sure how difficult it would be to distribute the funds now, but without Leader Huang's project, he wouldn't have dared to even think about it.

I had fantasized about this when the fund was first established, wondering if I would have the opportunity to spend 10 billion yuan to acquire a licensed company and then acquire a local bank to complete my full range of financial licenses.

Financial licenses include "bank, trust, insurance, securities, and fund licenses".

The trust ranks second, but it is the most valuable, surpassing the bank.

Only the three "financial holding company licenses" issued in later generations have a higher value than trust licenses.

If we can obtain a trust license through this, this business is guaranteed to be profitable.

As a former director of the Economic Commission, Huang was quite knowledgeable about finance and knew about this matter. He frowned and recalled an economic report he had recently read.

"Last year's trust plans raised only about 400 billion yuan, right? Are you planning to use this to raise funds?"

I don't believe that Chen Xuebing only wanted to use this license to make loans, but the trust market is indeed not very big.

Chen Xuebing smiled and nodded, but didn't say anything, afraid that he would laugh out loud.

Only 400 billion?

In 10 years, the trust market will reach 20 trillion yuan!

68 trust companies!
One company's capital is equivalent to that of several medium-sized city commercial banks!
After calming himself down, Chen Xuebing said, "If we want to do things well, this license is essential. As long as Leader Huang can help me apply for it, I am confident that I can save half of the companies."

As he spoke, he waved the documents in his hand and couldn't help but increase his bets.

"Oh?" Leader Huang's eyes lit up.

This kid in front of me is something. I knew that from the fact that his initial application for the "government-guided fund" was approved by the higher-ups.

Later, he went to Hefei and actually made the investment, which impressed him again.

He was indeed angry that Chen Xuebing didn't come to the financial industry meeting, but he was only angry that Chen Xuebing couldn't be used by him.

This kid definitely has a knack for business.

He asked with some curiosity, "What are you thinking? Tell me?"

Eager to secure the license, Chen Xuebing didn't hold back: "For so many types of enterprises, besides streamlining production capacity and improving product quality, the most important thing is the sales channel. I think only a retail supermarket with huge sales volume can save them. I happen to know one. If Leader Huang helps me with all the prerequisites, I will find a way to bring them over."

"A supermarket." Manager Huang felt there was some truth to it, but then scratched the back of his head. "You mean one? A chain?"

“Just one store,” Chen Xuebing said confidently. “I’ll bring the best supermarket in the country to Chongqing.”

"One store? Even if you bring in Walmart, you can't save so many businesses! Which supermarket? What's its name?"

If we look at this question from more than a decade later, the answer will be obvious.

But right now, Chen Xuebing isn't entirely confident.

"I'll keep the name a secret for now, but it's definitely not a small supermarket. As long as there are suitable commercial buildings available for rent, it will be at least 20,000 to 30,000 square meters."

"Twenty or thirty thousand square meters?" Manager Huang was shocked again. "You mean a supermarket or a shopping mall?"

With the current living standards, it's hard to imagine a supermarket of 20,000 to 30,000 square meters. Chongqing's Mingzhu Department Store, which is only 2,000 to 3,000 square meters, is already considered a large supermarket.

Twenty or thirty thousand square meters, that would be a small building.

Chen Xuebing chuckled and said, "A shopping mall of 20,000 or 30,000 square meters is a bit stingy, isn't it? If you give me a piece of land, I'll build a 50,000 square meter super supermarket in Chongqing."

"50,000 square meters?" Leader Huang chuckled. "What's the plot ratio? 3.5? It's only 10,000 or 20,000 square meters. You can just buy it directly. Land in our city isn't expensive. The average price for commercial service land is only three or four thousand yuan per square meter at most, and a little over a thousand yuan at the less expensive ones. You can't even afford a hundred million or two to build such a big supermarket? I really want to see what such a big supermarket looks like and how to make it profitable. If you really succeed, I'll apply for three years of tax subsidies for you."

These words really tempted Chen Xuebing.

Land prices are cheap in Chongqing.

The location you can get for a little over two thousand is already pretty good.

However, the construction and installation costs are higher than the land price; to create an attractive appearance, it costs about three thousand yuan per square meter.

Leader Huang's calculations were also wrong. 1.5 square meters of land is not enough. The supermarket needs to have some open space for greening and such, so it needs to have 40-50% open space, which means it needs at least 2.5 square meters.

Based on this calculation, the land price is fifty to sixty million, the construction cost is 1.5 million, and the total cost is two hundred million.

Chen Xuebing clicked his tongue, patted his thigh, and stood up.

"Let's see how this goes. Leader Huang, you should ask Old Kan about the license first. If you can get it sorted out, I'll wait for the bank loan assessment to come over."

(End of this chapter)