National Tide 1980.

Given the experience gained from Black Monday, many Japanese people once thought that prices would stop falling once they reached a certain level.
But this vague expectation in people's hearts has never been realized.

The Japanese stock market crash that began at the end of 1989 has continued to this day, with only two rebounds since then.

The intensity was relatively small, with the largest being no more than 10%.

Compared to the market's nearly 50% drop, it seems so pitiful.

On the contrary, after two short-term "technical adjustments," the stock price experienced an even deeper decline, causing capital invested in the Japanese stock market to become increasingly sluggish.

It's easy to imagine the situation that companies like EIE, which have heavily invested in the stock market, will face during this period.

That's right, EIE is not an isolated case.

Although this stock fell sharply due to human intervention, it was almost one of the top ten stocks with the largest decline in the entire market.

But in reality, there are many companies in the stock market that are in a similar situation to him.

Some companies may even have more dangerous underlying issues, but they are temporarily "hidden" and have not been fully exposed.

For example, Asahi Breweries, Olympus Industries, Yakult, Sanrio, Gakken, Tsumura... these listed companies that were once famous for their financial management skills have all suffered huge losses due to the significant depreciation of the assets they hold.

Among these companies, the one that suffered the most losses and was in the most difficult situation was Hanwa Kogyo, which was the first among the "Tokyo Six Ghosts" to create the concept of financial management.

Kitamo, president of Hanwa Kogyo, succeeded his elder brother Kitajiro as president.

Unlike Kitajiro, who focused his life on the steel manufacturing industry, Kitashiro, as the second president, had experienced two "oil crises" and was well aware of the fragility of Japan's real economy, making him more resourceful.

In order to mitigate the adverse effects of the Plaza Accord after taking office, he chose to speculate in foreign exchange to hedge against business risks.

At the same time, he was also keen on investing in the stock market and corporate bonds with warrants.

In fact, in principle, his decisions were not only correct, but also wise and forward-thinking, and he fully benefited from the dividends of the times.

As a result, Hanwa Kogyo quickly emerged from its operational difficulties, with profits soaring. It easily achieved significant profit growth outside its main business, reaping rewards and returns that exceeded the company's capabilities.

It can be said that they won at the starting line from the very beginning.

But the problem is that human desires are endless.

When making money through investing becomes too easy, no one will bother to focus on their main job, which requires hard work to earn meager profits.

In just five years, Bei Mao forgot its original aspirations and turned Hanwa Kogyo into a complete financial management skills company, making himself a prominent figure in the financial market.

His trading volume grew increasingly large, eventually reaching an astonishing 300 billion yen in a single day in the foreign exchange market, comparable to the trading volume of the Zurich Bank.

In addition, he also owns "special gold" with guaranteed returns from securities and trust companies, as well as stocks worth 800 billion yen held in cross-shareholdings with banks, and a considerable amount of real estate.

By the end of 1989, at the peak of Hanwa Kogyo's glory, its market value had soared to 1.6 trillion yen, more than 30 times the price Ning Weimin initially paid.

Despite having around a thousand employees, Hanwa Kogyo's main business was even losing money, with all profits coming from just ten people in its financial management department.

But unbeknownst to many, Hanwa Kogyo's total assets, including the outstanding balance of commercial paper issuance, have exceeded ten trillion yen.

Unbeknownst to many, the company's equity capital has reached one trillion yen, ranking sixth in the country.

It ranks behind only five companies: Mitsui & Co., Mitsubishi Corporation, Marubeni Corporation, Itochu Corporation, and Sumitomo Corporation.

In terms of net profit, it even surpassed Mitsubishi Corporation to rank first in the country.

As a result, many well-known business leaders in Japan have praised Kita Shigeru repeatedly, regarding him as a business idol worthy of learning from and emulating.

Kita Shigeru himself even made a boastful statement at the year-end party at the end of 1989: "No one expected that a company that had only accumulated 29 billion yen in capital over 36 years of entrepreneurship could grow to trillion yen in less than ten years after I took office. If I had been the president from the beginning, the company might have become the largest in the country long ago, or at least ten times the size it is now."

And this speech was met with thunderous applause at the time.

However, the good times didn't last. Who could have imagined that the Japanese stock market would turn downwards starting from Christmas Day in 1989?
Needless to say, it's quite obvious what will happen to Hanwa Kogyo, which profits from financial management skills, during the continuous stock market crash.

Without a doubt, having never experienced such a sustained stock market disaster, Bei Mao was extremely lacking in understanding of the risks brought about by market fluctuations, and seriously underestimated them.

Thus, in the first three months of 1990, Hanwa Kogyo's unprecedented crisis quickly surfaced after the economic bubble burst.

Not only did the company suffer a huge loss of 300 billion yen, but Hanwa Kogyo's stock price also plummeted from its peak of 8,970 yen in 1989 to 4,460 yen.

Its market value has shrunk by nearly half, falling from a peak of 1.6 trillion yen to 845.1 billion yen.

That's not all. Due to the huge losses suffered by shareholders, the company was in a state of panic, and President Kitamo was also facing strong internal pressure and the risk of losing control of the company.

This was mainly manifested in the fact that the company's executive director, Shunzo Terada, publicly expressed his dissatisfaction with the company's business model, which at the time focused on financial management skills, and launched an attack against it.

Terada Shunzo was Kitajiro's favorite confidant. As the representative of the interests of the steel industry camp, he advised Kitajiro at a board meeting regarding the losses caused by financial management, demanding that it change its business strategy.

Not only was Kitamo required to refocus on its core steel manufacturing business, but he was also asked to limit the amount of money he could spend on financial management, which was also the wish of the vast majority of Hanwa Kogyo's trading partners and employees at the time.

However, this move made President Kitashiro feel very embarrassed and angry. He believed that Terada Shunzo had selfish motives and intended to undermine his prestige, so he refused to express his opinion at the time, citing the need for time to consider.

However, Bei Mao himself knew in his heart that he could only hide for so long, and he would not delay making a response.

In particular, March is the month when Japan's fiscal year ends, and the huge loss of hundreds of billions will become a huge stain on the annual financial data. He will inevitably face accountability at the upcoming shareholders' meeting and will find it difficult to explain.

In addition, Japanese society has its own unique characteristics, with a prevalence of a gray industry called "kaisouya" (corporation houses), which is dominated by yakuza groups. This may lead him to an even more difficult situation.

It's important to know that this group of people typically buy a small portion of a company's stock and then exploit legal loopholes to become regulars at company shareholder meetings.

They call themselves professional shareholders, and their specialty is to make a ruckus and spout nonsense at meetings, questioning every aspect of the company's operations.

Their specialty is seizing on the slightest loophole and exaggerating it to an unacceptable degree, turning minor issues into intolerable flaws.

If a company is unable to address its problems, they will vehemently claim that the company is a failure and its leaders are untrustworthy, thereby driving down the stock price and causing significant losses to the company's management. It's fair to say that these individuals are solely focused on how to completely ruin and destroy a company.

They are the professionals among trolls, the masters of impromptu arguments, the nightmare of CEOs of major companies, and the murderers of quality stocks.

Therefore, when most companies are helpless in the face of such extortion, in order to protect their reputation and corporate social credit, as well as their current operations and stock price, they have no choice but to compromise with these people and accept their extortion and blackmail.

It is entirely conceivable that this situation would have been dire enough when the overall growth momentum of the Japanese economy was positive.

Now that the tide of economic development has receded, these parasitic forces, unwilling to see businesses suffer losses, will naturally exhibit even greater destructive power.

If things go wrong, it could very well lead to conflict and bloodshed.

So when Bei Mao thought about these things, and imagined that he would be questioned and attacked by countless professional shareholders at the shareholders' meeting, that he might be harassed, or even lose power, he felt a chill run down his spine and trembled.

Of course, he was unwilling to sit idly by and wait for his fate, so he tried his best to find a way to resolve the situation. After thinking it over, he decided to ask a reliable friend for help.

For example, Industrial Bank, Shanxi Securities, and of course, Ning Weimin, an individual shareholder who once held shares in both Industrial Bank and Shanxi Securities for a long time, exceeding the 5% threshold.

Bei Mao's idea was straightforward: as long as the combined shareholding of his supporters exceeded 50%, he would remain the direct controller of the company. Even if he faced attacks and questions from other shareholders at the shareholders' meeting, he would never lose his position as president and would still have the opportunity to recoup his losses and rebuild his prestige in the new year.

As for Ning Weimin, he had a good impression of Bei Mao and was somewhat grateful to him.

After all, they had known each other for several years.

The Bei Mao he knew was vulgar in appearance and somewhat ambitious.

He likes to show off, loves flattery, and is easily blinded by victory.

However, he is quite capable in foreign exchange investment, and he is definitely not stingy; in fact, he is quite generous to a certain extent.

For example, when the company was making money in the past, Beimao increased the dividend payout ratio to shareholders every year.

He also took good care of Ning Weimin's business on a regular basis.

He enjoyed entertaining clients at Ning Weimin's restaurant, and the annual year-end party was held there. He was also a regular at the Chixia Club.

Even as employee benefits and gifts for clients, he ordered thousands of rolling suitcases from Ning Weimin alone, and bought even more imported liquor.

He also provided Ning Weimin with great convenience and assistance, especially in the matter of purchasing scrap steel slag domestically.

Ning Weimin always kept these benefits in mind, so whether it was for personal or emotional reasons, or for public or private reasons, he couldn't just stand by and watch Bei Mao suffer misfortune and be forced to resign by others, so he had no choice but to step in and lend a hand.

So even though Ning Weimin was busy in Osaka handing over the Yamato Tourism business, and he had already sold all his Hanwa Kogyo shares, he still decided to fly back to Tokyo a few days later on the day of the shareholders' meeting to support Kitamo.

He also urgently contacted Kenichi Sagawa, who was staying in Tokyo, and asked him to buy another 40 billion yen worth of Hanwa Kogyo shares for him within three trading days.

However, on the other hand, he's not a fool who's always trying to help others; his most basic principle is that he can't lose money.

Therefore, he then asked Kenichi Sagawa to sell at least the same number of Hanwa Kogyo shares through his Nomura Securities account as soon as possible to hedge the trade.

In this way, Ning Weimin once again ventured into the Japanese stock market, and in what could be described as an absurd and pointless act, he helped Bei Mao stabilize the company's situation and retain his position as president.

Even afterwards, when Ning Weimin expressed his gratitude to Bei Mao for the banquet, he kindly advised him to liquidate his financial assets and real estate as soon as possible.

I want to warn this guy to stay away from the risk of an economic bubble bursting, so he doesn't repeat the same mistakes and go down the same old path where "the person is still alive, but all the money is gone."

It should be said that we have done right by him.

Unfortunately, the problem with Sakawa was a problem of its time, and people are limited by their own limitations; failing to recognize it will only make a difference.

Even after reaching this point, Bei Mao still lacks the necessary respect for the destructive power of an economic bubble bursting, and the lessons he has just learned have not been taken seriously enough.

On the contrary, Kitamo still believes in the illusory myth of the Japanese economy.

He neither believed that land prices in Japan would collapse and fall, nor that the financial assets he had invested in would perish.

His reasoning was that his cross-shareholding with banks amounted to 800 billion yuan, and he currently had 100 billion yuan in profits. He believed that as long as he didn't sell, the value would eventually recover.

In addition, the book value of the land has increased from 5 billion yen to 250 billion yen, and it looks like it will soon reach 300 billion yen.

He believes that these alone will be enough to make up for the special loss of 300 billion yen in the future.

Not to mention, financial assets such as special business funds and designated funds issued by securities companies and trust companies also offer additional promises of yield, guaranteeing that the actual return will be higher than the target interest rate.

It was precisely because of his trust in Japanese banks and trust companies that Kita Mochi was so convinced of this.

He proudly showed Ning Weimin the document he held in his hand—a guarantee signed and sealed by the other party—and repeatedly suggested that Ning Weimin should also take out his extra money to buy some.

Ning Weimin could only politely decline and wish him good luck.

This is what they mean by "it's hard to persuade a damned ghost with kind words."

If someone wants to court death, you can't stop them no matter what you do. They have to experience it firsthand before they'll know regret and fear.

However, on the other hand, it might not necessarily be a bad thing for Ning Weimin that this guy insisted on courting death.

After all, Hanwa Kogyo's technology is still useful to China. If we wait until this company is driven to the brink of bankruptcy by Beimao, it will be a real problem.

Not to mention that Ning Weimin will be able to buy it at a very low price.

I imagine this guy would not only not refuse, but would also be sincerely grateful to Ning Weimin for his timely help, right?
Thinking about this, Ning Weimin himself felt like he was playing the villain.

He actually felt a little guilty about scheming against a guy who wasn't malicious, disliked steelmaking, and was only interested in foreign exchange trading. (End of Chapter)