King of Capital

"Everyone, please be quiet. The special investigation team's meeting will begin now. Please ask colleagues from the Securities and Exchange Commission to report on the situation."

The man was in his prime, but his hair was already gray. He wore a pair of black-framed glasses on his plump face, and his speech and behavior were calm and rational.

Dozens of key business personnel from the Securities Regulatory Commission, Insurance Regulatory Commission, Banking Regulatory Commission and Inspection Departments present all had solemn expressions. They had long heard of this rare technical leader in the industry. More than a hundred colleagues from their original units spontaneously saw him off for his job transfer. It was so difficult and yet so successful.

In ancient times, he should have received the umbrella of all people.

After months of working side by side, every colleague in the joint special investigation team has felt more deeply that they are fulfilling their responsibilities.

If, as the financial industry jokes, supervision is the Imperial Guard, then Team Leader Chen is the sharpest dagger.

The young girl looked at him with admiration and yearning. She imitated his behavior in a childish way. She stood in front of the big screen, looked around the audience, and spoke calmly: "After investigation, it was found that Qianhai Life Insurance, Jushenghua and Baoneng Real Estate, hereinafter collectively referred to as the 'Baoneng Group', had serious violations in the process of investing in Vanke."

"Let me interject one thing. Strictly speaking, this has exceeded the scope of violations. It is illegal!" Team leader Chen said in a firm voice while holding the microphone.

The deputy team leader beside him nodded slightly with a tense expression: "Continue reporting."

"Okay, first of all, in terms of insurance business, the universal insurance business of Qianhai Life Insurance, a subsidiary of Baoneng Group, has high return rate and short redemption cycle, which has resulted in the illegal fact that it is called insurance but is actually investment and financial management." The young girl stopped there.

The wave of mobile Internet, along with the World Cup two years ago, gave birth to numerous online lottery platforms with a scale of tens of billions. Due to the attributes of Internet platforms, these platforms once caused problems such as chaotic administrative jurisdiction and weak supervision.

Afterwards, top-level regulators cut off the entire industry with one stroke, but the general public, who were popularized the concept of Internet finance through this "new thing", flocked into related fields based on their instinct to make a profit.

Insurance is usually divided into two types, either paying the principal and interest at maturity or paying the investment return at maturity. There is also a combination of the two, where the insurance company divides the user's money into two parts, one for principal and interest, and the other for investment - universal insurance.

Qianhai Life Insurance took advantage of this loophole and sold the riskiest investment insurance under the guise of universal insurance with a relatively low regulatory rating.

That is, if a user invests 100 yuan, 1 yuan will be used as the principal and interest, and the remaining 99 yuan will be used for investment.

This move makes Qianhai Life's universal insurance annualized return 7%, while the bank's similar products have an annualized rate of up to 5%.

The most critical thing is the redemption cycle. The mobile Internet has shortened the time from years to months and weeks, and the convenience of user investment has been infinitely magnified to the extreme. In just two years, it has absorbed tens of billions of public funds.

In essence, there is no difference between it and public financial management funds. The Baoneng Group bought 10 billion yuan of Vanke shares through insurance funds under Qianhai Life Insurance, and all of it came from this.

Evergrande also used Evergrande Life Insurance funds to buy Vanke shares. Currently, many institutions in the entire insurance industry operate in this way. Some are even so crazy that they simply set the principal guarantee interest to 0...

The insurance regulatory department will need to take action at a macro level next, which is not the topic we are going to talk about today.

After the young girl gave a brief overview, she turned to her colleagues in the banking regulatory department and said, "Secondly, Baoneng Group has used operations such as inferior funds and circular pledges to achieve a lending channel for investment purposes in Jushenghua."

"Well, let me add a little bit. Jushenghua's loans involve multiple regions, multiple private banks, and a large number of securities companies are also involved."

The deputy team leader coughed lightly and said, "The length of the entire chain and the complexity of the situation are far beyond our imagination. During the investigation, we found many unexpected difficulties."

"But the Securities and Futures Commission and the Inspection Commission, our brother departments worked together to overcome many obstacles. It can be said that Baoneng is a very typical case..."

He simply supplemented the conversation for ten minutes, ranging from business to spirituality and then to career ideals. Everyone looked at each other in silence.

Team leader Chen gave face and did not interrupt. After all, on the insurance side, it was still about the collision and adjustment of supervision and changes in emerging business models, while on the bank side, it was about traditional problems that were unsustainable and in urgent need of change. Not only was he embarrassed, but he was also full of complaints.

The Baoneng Group used about 70 billion yuan of its own funds through Ju Shenghua to set up nine "asset management plan" entities, and then borrowed tens of billions of funds from banks and securities institutions.

The company's own funds act as subordinated funds, and funds from banks and securities firms act as priority funds, which are invested in the stock market to purchase Vanke shares.

At first glance, it seems that there is no problem, but regulations do not allow banks' money to flow into the stock market, while the supervision of asset management plans is extremely lax and they can invest in anything.

This resulted in the bank's money being put into the "asset management plan" within the jurisdiction of the banking regulator, with no mention of investment in the stock market; within the jurisdiction of the securities regulator, the asset management plan could invest in anything, including the stock market of course. As for where the Baoneng Group's money came from, they didn't know.

From the bank's perspective, there is a mechanism for priority and subordinated funding. Once Baoneng's own funds are depleted and risk control is triggered, they will immediately recover their investment.

It should be considered a regular investment business. How can it be said that funds flowed into the stock market illegally?

In short, the Baoneng Group is called insurance in the insurance industry but is actually investment and financial management, and is called investment in the banking industry but is actually lending, thereby bypassing supervision and leveraging.

Of course, if this alone would not embarrass the banking regulatory authorities, Yao Zhenhua also did something big.

The 70 billion yuan of his own funds that he invested in nine asset management plans were also borrowed, using the method of revolving mortgage loans, and the lender was Zhejiang Commercial Bank.

The two parties first established an investment company. The Baoneng Group invested 13 billion yuan and the latter lent 53 billion yuan to the company. The money was invested in nine asset management accounts and then tens of billions of yuan were borrowed from the bank in the name of investment.

Every step in the whole process is compliant, but when put together they seem non-compliant. But where is the non-compliant?
The China Banking Regulatory Commission has said that banks are not allowed to approve loans to social enterprises, or the China Securities Regulatory Commission has strictly prohibited financial companies from investing in the stock market...

"In summary, during the acquisition of Vanke, Baoneng Group only transferred 13 billion yuan from its Hefei branch project. The remaining funds totaling nearly 227 billion yuan were divided into two parts: Qianhai Life Insurance invested billion yuan, and Ju Shenghua invested billion yuan through layers of leverage."

The young girl talked about the last page of the PPT and pointed to the bold words on it and concluded: "We can be sure that this is a typical premeditated 'regulatory arbitrage' operation."

"The inherent lag in supervision means that every time we discover a loophole, there are already some 'gray rats' there."

Team leader Chen paused for a moment and said, "We view them positively. Sometimes they promote the progress of the industry. So from the perspective of legal supervision, we often talk about the concept of 'no retroactivity'. Gradually, the so-called 'regulatory arbitrage' has been formed. Many people specialize in taking advantage of loopholes as a business."

"I can say without hesitation that the Baoneng Group is a typical example and a leader. But I feel very sorry for it this time. After months of hard work, it was caught in the act!"

He sat up straight and solemnly announced: "No matter how the brother units learn from this and fix the loopholes in the future, we must strike hard today to let the market see the role of supervision."

There was a burst of applause in the conference room. It was not enthusiastic, but it was just out of respect for Team Leader Chen personally.

The Wanbao War attracted so much attention because it was too typical. It almost completely wiped out the entire current regulatory system and exposed all its drawbacks and defects.

But everyone finds themselves powerless to fundamentally change anything, and the people who make the rules sit in cubicles.

"Xiao Fan, how do you feel? Are you tired?"

After the meeting, the backbones of various business units dispersed and were busy with the final breakthrough and finishing work. Team leader Chen stopped the young girl and asked her a question.

"Well, I can still hold on. I don't feel tired because everyone is working so hard."

"Since you're not tired, can you go on a business trip with me? We have to leave now."

"No problem, Team Leader Chen, shall we go to Shenzhen?" "Don't rush to agree. I heard that you and Xie Jingxing are friends, so I want you to help me convey a few words to him in a private capacity."

"I……"

"Think about it on the way. If you want, you can get off in Zhuhai. If it's not convenient, you can go to Shenzhen with me to see Baoneng in person."

…………

[Insurance is about protection, and insurance supervision is about supervision: the insurance supervision department requires Qianhai Life Insurance to make rectifications within a time limit and transfer insurance funds to a special supervision account. ]

[Baoneng Group announced that it has abandoned its plan to buy Gree shares and may exit early through block trading. ]

[Evergrande statement: We are deeply disturbed and will immediately rectify our insurance business in accordance with the guidance of relevant departments. We will fully consider Vanke's operating conditions and give unconditional support. We can transfer our shares to Shenzhen Metro Group at any time.]

[Sources who have close contact with Wang Shi revealed that the joint investigation team has entered Vanke, Baoneng and Evergrande to supervise rectification. If necessary, the possibility of joint law enforcement agencies taking action is not ruled out. The state-owned assets department strictly ordered China Resources not to make any statement on the Vanke incident at will and not to transfer its shares to Jingxing Group. Shenzhen Metro Group's acquisition of Baoneng is a foregone conclusion. ]

[The chairman of Zhuhai Gree Group said in an interview that they are actively communicating with Jingxing Group to make initial progress, and will never let Gree Electric become the second 'South Glass Group', and will firmly defend the interests of small shareholders! ]

On Monday, the regulatory bell rang outside the market and Gree’s stock price fell accordingly. The entire market guessed what would happen next.

As expected, Boss Xu not only slid down to his knees quickly but also licked him fiercely with his tongue in a very disgusting way. While the public was confused, Zhuhai State-owned Assets kicked Baoneng Group away and pounced on Xie Jingxing.

Yao Zhenhua was unwilling to accept failure and hoped to survive by giving up Gree.

News and public opinion are updated hourly, and the Wanbao dispute is rushing towards the end at a pace that is not affected by any individual's will.

"A thousand-mile dam destroyed by an ant hole?" Xie Jingxing put down the tablet.

Yu Nian looked at the text displayed on the screen and shook his head: "It is inevitable in the accident."

"Actually, you don't need to rush to Zhuhai. Even if I'm a bad person, I can't cheat my father-in-law!" Xie Jingxing laughed.

The gossip rumors are true, and China Resources is under pressure to the limit.

Yu Nian's father was in a very awkward position. If his cheap son-in-law forcibly demanded the execution of the share transfer intention contract that both parties had just signed, he would be ashamed.

But that's not what Yu Nian cares about.

CSG Group is one of the earliest Sino-foreign joint ventures in China, one of the earliest listed companies, and a leading company in the architectural glass industry.

Over the past few decades, actual control of the company has changed hands several times, with the management holding less than 1%. Last year, Yao Zhenhua targeted it and raised his stake four times in a row, with his shareholding exceeding 20%. In March of this year, he pushed for a reorganization of the board of directors and successfully occupied three seats on the board.

In just over half a year, he wiped out the original management team. His people shouted at the board meeting: How much money can you make by working hard in the industry? You can only get rich by engaging in capital operations and buying and selling!
Until five days ago, NSG Group issued seven major personnel change announcements late at night, and the chairman led all senior executives to resign in anger.

The Shenzhen Stock Exchange required it to make in-depth information disclosure on this matter, but Baoneng disclosed the information in the name of the company and stated that it would sue the original management team on the grounds that they stole the company's patented technology.

The market was in an uproar, and the statement that hard work in industry can only earn you a little money touched the most sensitive nerves of the general public.

The consequences of Vanke and Gree being plundered by capital barbarians were vividly demonstrated, so the investigation team, the regulatory unit that had been stationed at Baoneng for several months, seized this extremely legitimate reason and rang the bell.

However, Xie Jingxing is about to take over the overall situation.

Whether it is Yao Zhenhua, Wang Shi, Evergrande or Zhuhai State-owned Assets, all the righteous and shameless will be swept into the trash can.

No matter how hard you try, you can't defeat God.

"Is this the result you want?" Yu Nian felt a little distressed.

"The chairman of Anbang Insurance is a major shareholder of Zheshang Bank. He and Yao Zhenhua have long had a tacit understanding."

Xie Jing Xing still smiled and shrugged his shoulders easily: "The facts have proved that I have the ability to put an end to his plan that he has been planning for many years. I just didn't play with him in the end."

“There is also a gap between capital barbarians.”

Yu Nian pursed her red lips and tilted her head to look at him, wanting to tell a joke, but her nose felt sour and the words that were about to come out of her mouth turned bitter and were swallowed back into her stomach.

The bell of supervision meant that her man had no room to prove himself, and the dispute over Wanbao would always be a stain on him.

In 2016, Xie Jingxing and Yao Zhenhua jointly contributed to the most typical capital barbarian invasion incident in China to date, accumulating rich negative experience for my country's financial supervision - in the future, people will look back and describe it in just a few words.

If the author follows the style of the popular online novels on the theme of rebirth, he will probably try every means to make the protagonist stand out and kill these two villains...

…………

"Jingxing, we have gone from mixed supervision in the early days of the founding of the People's Republic of China to separate supervision today. It took several decades and generations of financial professionals to achieve this. Now we have come to a crossroads again. It is imperative to resume mixed supervision. Our business is about to enter deep waters."

"You represent yourself?"

"…Why do you ask that?"

"I'll call Song Anli and Zhao Mengche some other day, and you can invite Qi Tian, ​​Xue Haoran and the others, so we can all get together."

Xie Jing Xing recalled and said, "I remember that time when you were drunk you said that you wanted to become a super awesome supervisor and let everyone see your hateful face now that you have achieved success and fame."

"You, the most powerful investor, are much more hateful than me!" Fan Haonan bared his teeth and made a threatening gesture.

Xie Jingxing raised his eyebrows: "I thought you would praise me."

"Team leader Chen said, thank you Mr. Xie for your contribution to my country's financial industry, history will remember you."

Fan Haonan burst out laughing and said to himself, "Why do I feel like what I said makes you immortal?"

"Then don't remember it." Xie Jingxing shook his head repeatedly.

Success does not have to be his.

(End of this chapter)