1988: Back to the human world for a few years

Chapter 430 Ming (2)

In China, even a middle school student knows the truth that "the bigger the matter, the smaller it will be".

Although the internal control work exchange meeting held by Dahua Company today was nominally attended by four major internal institutions, namely the Supervisory Committee, the Board of Directors' Audit Committee, the Board of Directors' Related Transactions Committee, and the Board of Directors' Risk Management Committee, in reality, there were only eleven members in total who attended the exchange meeting.

Considering the size of Dahua Corporation, the scale of the eleven-person meeting is not a small meeting in the true sense, but considering that the two parties attending the meeting are from the two major systems of the board of directors and the supervisory board, and it is a rare time for them to negotiate and communicate on the same issue with joint responsibilities, the number of eleven people is actually as small as it can be, which shows the importance the company attaches to it.

Of course, even though the various committee members of Dahua Company often hold multiple positions, no matter what, the total number of members of the four major committees cannot be just eleven. Therefore, more than 60% of the committee members did not attend today's meeting.

The members who were unable to attend the meeting can be divided into two categories:

The first category is those who do not have enough functional authority and are not qualified to participate in today's meaningful internal control work exchange meeting.

For example, Du Chuanming from Business Department 1 and Lin Luosu from Asset Preservation Department 2, although one is a member of the Board of Directors’ Related Transactions Committee and the other is a member of the Board of Directors’ Risk Management Committee, they were not on the list of attendees.

The other category is those who have sufficient functional authority but did not attend the meeting due to personal reasons.

For example... Yang Mo.

As the vice president who is also a member of the Related Transactions Committee and the Risk Management Committee, he actually canceled today's meeting on the grounds of being unwell.

Anyone can tell that this guy is lying. After all, he was still energetic last night and ran to the square of Commercial Street and strolled around for more than two hours. It is impossible for him to suddenly become seriously ill overnight... In fact, anyone with eyes can see from Miss Mu's pretty face that this guy is definitely fine.

What a joke, can't you see that there is still some amorous charm on the face of this young lady? If Yang Mo is really sick, how can someone's fiancée have this kind of pink shyness on her face that is obviously lingering after a young person's morning escapades?

However, even though everyone saw through it, no one was so tactless as to say anything.

It's very simple. With Yang Mo's current weight in Dahua Company and his usual strong style, if he really attends the meeting today, you can tell with your ass that this meeting will eventually turn into a one-man show for him.

So, although I don’t know why this guy didn’t come to participate in this internal control work exchange meeting initiated by his woman, this is a good thing after all.

In a sense, although Miss Mu is Yang Mo's fiancée, she is different from a guy who is extremely hostile to the Dongying faction and has been committed to undermining the Dahua Company. This stunning young beauty is considered half "one of their own" to many people.

Therefore, although everyone still doesn't know what bombshell Miss Mu is going to drop at the meeting today, if you think about it carefully, it shouldn't be too bad.

………………

"According to statistics from the Finance Department, since the day Dahua was established, up to now, the company has transferred funds for support and bottom-up payments to 303 tertiary industry units under its command (originally 374, but after several rounds of internal reorganization, the number was reduced to 303), totaling 7400 million yuan!"

Just like all the state-owned enterprise cadres’ usual method of “exaggerating the big and making the small” at the meeting, although it was clearly an internal control work exchange meeting, Miss Mu looked at the participants with a look of regret, and then threw out the big hat she had prepared: “This is close to 5.7% of Dahua Company’s initial injection of funds. We are all smart people and should know what it means for a company’s book capital sinking ratio to exceed 5%!”

"What's even more worrying is that it's only July now, and it's been just half a year since Dahua was listed... and for most tertiary industry units, the first half of the year is not the time period with the largest funding gap."

"When we enter the second half of the year, especially when the Spring Festival is approaching, all kinds of final accounts, various arrears, plus the year-end benefits and bonuses of employees will accumulate. It is absolutely impossible to settle them with just 7400 million in transfer payments!"

After a slight pause, Miss Mu's face became unusually serious. "I once asked Minister Ma from the Finance Department and Section Chief He from the Drilling Company to jointly estimate this matter. Both of them are experts in the field of accounting and have rich experience working in central enterprises. They are also familiar with the situations of the tertiary industries under their respective units. I personally think that the figures given by the two professionals are of great reference value."

"However, the figures estimated by Minister Ma and Section Chief He are indeed somewhat shocking... No, it should be said that they are really sleep-depriving!"

After a long pause to whet everyone's appetite, Mu Liya's tone was filled with a strong sense of powerlessness: "It is estimated that in the second half of the year, Dahua Company needs to pay the 303 tertiary industry units a transfer amount that will not be less than 1.6 million... Adding the 4700 million in the first half of the year, the total amount of annual one-way payment transfers exceeds 2.07 million, accounting for 15.9% of Dahua Company's capital injection this year!"

"Everyone, I don't know how you feel after hearing this number, but as the director of the Risk Control Department, when I heard this number, my first thought was how is this possible!? And my second thought was... I want to resign!"

Wow~!

Even though everyone present had experienced many storms, they still couldn't help but get excited when they heard this number and ratio.

The total amount of one-way payment transfers exceeded 2 million, and the proportion of capital sinking was nearly 16%.

What kind of concept is this!?

You know, generally speaking, if a company's bad debt ratio exceeds 10%, it has reached the red alert line, not to mention that the capital sinking ratio is as high as 16%! ?
There is still some hope for recovering bad debts through various means, and if that doesn't work, they can be packaged into non-performing assets and sold to other companies. However, the capital sinking caused by one-way payment transfers such as this one to provide a guarantee for subordinate units falls into the category of business operating costs. Apart from gritting your teeth and bearing it yourself, there is no other possibility of conversion!
This, this, this...

Ding Xiang, who looked calm and composed at first, suddenly looked ugly.

This transfer payment expenditure and capital sinking ratio, which is far higher than expected, would make even someone who doesn't understand business know how serious the matter is, not to mention that he is not completely ignorant.
Since Dahua Company was listed and established, although Yang Mo has solved nearly 70% of the employee diversion targets, there are still a little more than 30% of the diversion targets that have not been completed.

Logically speaking, apart from advocating the creation of a commercial demonstration center from the beginning and approving more than a dozen projects against all odds, Yang Mo basically did not occupy Dahua Company's book funds. All these projects together only cost more than 70 million yuan... So according to the proportion of funds used, Yang Mo has done his best to help solve % of this year's employment targets.

Now that Dahua Company's on-book funds have been divided up, no one would have the face to hold him accountable even if Dahua fails to complete its core mission for the year.

But the problem is, due to some well-known reasons, it is not an easy task to rely on the more than 30 tertiary industry units under Dahua Company to solve the remaining 2.1%, or about employment targets... Even though the various departments of Dahua Company seem to be thriving in this period, with internal restructuring and business expansion, in reality, they have not even completed employment targets in total.

So the question is, people in Dongying are used to the heavy asset model, so the nearly 10,000 new employment indicators were created in the form of expansion and iteration... In other words, these jobs were created with money.

Those who have been involved in heavy asset business models know that this type of expansion requires continuous injection of funds until it can achieve a dynamic balance between profit and loss. Only then can the project be considered basically stable. Therefore, before that, the relevant budget funds must not be misappropriated.

But now, with Miss Mu's two sets of numbers coming out, a deadlock has emerged.

The amount of funds that need to be transferred to the tertiary industry units in a one-way manner is so high that if we continue to provide them with a bottom line, a large number of expansion projects will inevitably be diverted from the budget, and we will not be able to add enough jobs as planned, divert enough laid-off workers, and these projects may even be shelved.

But if we do not continue to support those tertiary industry units, the problem will still be serious.

Once these units do not have an injection of fresh blood, they will inevitably stop working and production, and will be unable to pay wages, which will eventually result in a large number of laid-off workers... What's more frightening is that judging from the amount of transfer payments required, once the weaning is stopped, the number of newly laid-off workers may even exceed 2.1.

No matter which of the above situations occurs, Ding Xiang has no idea what will happen to the second generation of people who have the support of big names in the company. However, as the nominal general manager of Dahua Company, he will definitely be regarded as the person who is primarily responsible and will be pushed out to take the blame. He won't even know how he died then!

No~!

It's not just him.

Thinking of this, Ding Xiang secretly glanced at the two supervisory representatives of the Supervisory Committee and found that their faces were not looking good either. He immediately felt a sense of revenge... I let you always find fault with me and always find ways to create opportunities for certain people. Now, we are all in the same boat. If the boat sinks, no one can escape!
After taking a deep breath, Ding Xiang frowned and looked at Miss Mu: "Minister Mu, I'm not doubting anything, but this data... is it exaggerated?"

Everyone understood what Ding Xiang meant. The budget for a bottom line for subordinate units like this cannot be estimated simply by relying on a few financial statements. You have to have a very good understanding of these units... Take the liquor that Miss Mu first achieved success with, for example. The liquor products in many regions often show losses in the first half of the year, and sales account for only about 30% to 40% of the annual total. The real peak season is in the second half of the year. If you use the data from the first half of the year to infer the second half of the year, or even come to the conclusion that there will be a loss this year, that would undoubtedly be laughable.

It is obvious that the financial personnel of a number of state-owned enterprises, including the headquarters and Dahua Company, are very skilled in accounting, but when it comes to understanding the market situation and estimating the future operations of the company, it is really difficult for them.

Upon hearing this, Mu Liya just smiled and turned her gaze to Ma Bin, the Minister of Finance.

Seeing this, Ma Bin just sighed heavily: "Chief He is not only the former chief of the Finance Department of the Drilling Company, but now he is also the acting chief of Momo Baitou... Due to the nature of Momo Baitou's business, he has a better understanding of the fields involved in most of the tertiary industry enterprises under Dahua Company. In addition, when making business forecasts, for each unit with an asset scale of more than 800 million, relevant calculation models are adapted according to their respective industry characteristics, including market prospects, channel reach, product mental influence, commodity year-on-year competitiveness, sales cycle, marginal cost and other considerations, all of which are taken into account."

At this point, Ma Bin's tone was somewhat inexplicable: "Although I cannot judge whether Chief He's speculations are correct, it is an indisputable fact that he is far more professional than us in this area."

Although no positive response was given, Ma Bin's implication was very clear.

He is the acting section chief of Momobaitou. I don’t need to say more about what Momobaitou does, right?
And whose territory is MoMoBaiTou? I don’t need to point it out, right?
With Yang Mo around, it is not difficult to understand that Mo Mo Bai Tou has mastered some prediction models that we have never heard of before. If this prediction model is not reliable at all, Yang Mo would have thrown it into the trash can long ago. How could He Yongyi have the chance to show off in front of Miss Mu and himself?
Hearing Ma Bin emphasize the four words "silently invest" a little, everyone fell silent and didn't even have the heart to refute.

As everyone knows, Yang Mo always keeps all the good things in his own hands, including a series of projects represented by the commercial demonstration zone, as well as departments such as Xialiu Sales Agency and Momo Baitou.

Apart from anything else, with a funding budget of only 2000 million at the beginning of the year, Momobaitou has participated in more than 60 projects in just half a year, and 90% of the projects have met the six-month survival rate and financial health rate. This alone has left Dahua Company far behind.

Their achievements are there. What confidence and face do you have to question the data deduced by the acting section chief?
Seeing that everyone's faces gradually became serious, Mu Liya seemed to think that the atmosphere was not solemn enough and continued to pour oil on the fire: "If it is just that the one-way transfer payment is too high and the proportion of capital sinking exceeds the red line, it is not that there is no way to solve it. After all, as long as the company handles special matters specially and temporarily relaxes the supervision of some links, we can still barely get through this difficult time this year through the method of account connection + related transactions." In front of the Supervisory Committee and the Audit Center, after proposing a solution that the other party would never accept openly, Mu Liya changed the subject: "But the problem is, according to preliminary estimates, the hidden liabilities of more than 1.4 tertiary industry units under Dahua Company... especially the hidden liabilities caused by internal funds raised by employees and third-party funds borrowing, are actually no less than million yuan, which is very fatal."

"This means that even if we want to use some illegal financial operations to cover up the trouble, it has become unrealistic... If the financial operation procedures of these tertiary industry units are standardized and they are only facing financial difficulties due to poor management, then temporarily withdrawing funds from the budgets of those investment projects to bridge the gap internally, although it is illegal, the risk is not too great; but if these internal bridge funds themselves face huge risks of silence during the circulation process, then once an accident occurs, all of us here, one by one, will be invited to have tea with the department!"

Hidden debt?

The Audit Center's Chief Auditor Liu Bo and the two supervisor representatives were certainly surprised, but people like Ding Xiang, Song Wenxuan, and several other participants who were not very proficient in financial knowledge showed puzzled expressions.

Ma Bin explained: "Generally speaking, a company's liabilities are divided into book liabilities and hidden liabilities. The sum of the two is the company's actual liabilities. However, compared with the intuitive financial book figures, the company's hidden liabilities are much more difficult to find... Especially when these companies adopt the factory director responsibility system and there is group fraud among the management, it is almost impossible to determine the true amount of liabilities through due diligence and simple audits."

After a pause, Ma Bin continued: "Basically, the hidden debts of enterprises come from three main sources: private lending, financial leasing, and self-raised funds by employees."

"Because Dahua is a central enterprise, unless we or the headquarters take the lead or allow it, under the current management system, it is basically difficult for those tertiary industry units to raise funds through financial leasing and then generate hidden debts... After all, if they do so, the parent company, that is, Dahua, will often have to bear unlimited joint and several liability, which is unlikely to go unnoticed by us."

"So, the most common way nowadays is for factory directors or executives to borrow money from private third-party organizations by relying on their connections or informal collateral... Since these private third-party organizations are not formally operated, they will not go through the bank system to do mortgage registration procedures. In fact, they don't need to do this. After all, for them, such private operations can be flexible and diverse in terms of the way they collect money. If it really doesn't work, their way of collecting money has never been formal."

When everyone heard this, they were suddenly enlightened.

Ma Bin smiled and said, "In fact, if we just go through private third-party lending, that's fine. To put it bluntly, Dahua Company has never had to bow to anyone in Dezhou and Lanling. Moreover, this is a bad debt caused by the collective fraud of the management of the subordinate units. Even if we don't admit it and take asset preservation measures, what can they do to us?"

Everyone nodded again. That's right, this is not Dongying's territory. There is no need to behave in a cowardly manner. If you dare to mess around, even if it is not appropriate for local authorities to intervene in such a bad debt that sounds bad, the asset protection department of Dahua Company will not sit idly by.

Thinking of this, some people couldn't help but feel a little regretful. If they had known about this matter, they should have invited Lin Luosu, the director of the Asset Preservation Department, to attend the meeting.

Seeing this, Ma Bin sighed softly: "Although there is no need to worry about the hidden debts caused by private third-party loans, employee internal financing is a sensitive and extremely troublesome problem!"

"Everyone knows that last year, 200,000 Anshan Iron and Steel employees raised funds to purchase coal to help the company overcome difficulties. This incident was praised and even regarded as an example of employees' hero spirit."

"But in fact, everyone knows that internal fundraising by employees is not an innovative move. Since the mid-1980s, there have been many related cases, but the media rarely reports on it..."

Before he could finish his words, Song Wenxuan interrupted him: "Minister Ma, we are aware of what you said, but there are relevant registration procedures for employee internal fundraising, and there are also special statistical reports. Although it is related to employees and their families and is indeed very sensitive, it has nothing to do with hidden debts, right?"

Upon hearing this, Ma Bin was somewhat surprised that Director Song, who had always performed well in all aspects, would interrupt him so rudely today. He also didn't understand why he asked such a superficial question. However, he felt relieved when he thought that the second generation of the command center had always been out of touch with the ground, and that this young man had spent most of the past two years studying in the UK.

At that moment, he smiled with a complicated expression: "Director Song, if the formal procedures are followed, the internal fundraising of employees does need to be registered in detail, and special materials must be submitted to the superiors, so it cannot be included in the category of hidden debt... But what if it is not the normal procedure you think?"

???

Song Wenxuan showed a bit of surprise on his face.

Zhuo Mali, who was standing by, couldn't bear to watch any more and gently reminded him, "Some things don't necessarily require voluntary participation... wage arrears, apportionment, IOUs, and a unified tone... Do you understand?"

Song Wenxuan suddenly realized and nodded along with everyone else, his expression becoming increasingly serious.

After Ma Bin's reminder, everyone finally understood why Miss Mu said that even if the top management of Dahua Company wanted to relax the financial operation process as a special case, with such a large amount of hidden debt there, it would absolutely not be possible to choose this bridge method.

It's very simple. Human beings are creatures that can share adversity but it is difficult for them to share wealth. In the past, the management of our unit covered up the problem and everyone thought that the unit was really out of money. Therefore, whether it was half-pay, wage arrears, withholding bonuses, or just going through the motions to maintain the unit's image and stick to a unified tone, they could accept it... As for under what name the money was recorded and used, they were unlikely to know.

However, once Dahua Company takes the lead in some related transactions and connects the accounts, the news that there is money in the unit's account will be impossible to conceal. By then, with public outcry, it is very likely that some big commotion will occur.

Chief Auditor Liu Bo obviously understood the difficulty of the current deadlock better than most people. He took a deep look at Miss Mu and said in a deep voice: "As the main person in charge of the company, everyone should be very clear about one thing... We are not grassroots employees who are only responsible for pointing out and reporting problems. [Problems raised must be solved] is our working principle."

"so……"

"Minister Mu, since you initiated this internal control work exchange meeting and pointed out the serious situation the company is currently facing, I would like to hear your and President Yang's solutions."

Liu Bo deliberately emphasized the words "internal control work exchange meeting" and "General Manager Yang".

The meaning is very clear. Since today is an exchange and discussion meeting on internal control work, then after you, Minister Mu, have pointed out the problems existing in the company, please stop and get to the point... The accusation you have made is already big enough. If you continue to make accusations, today's meeting should not be called an internal control work exchange meeting, but a "strategic work adjustment meeting."

As for mentioning Yang Mo specifically, the meaning is very straightforward. You and Yang Mo are already a couple, and Yang Mo actually didn't come to such an important meeting today on the pretext of being sick. It's obvious that there are some things that are not convenient for him to say himself, and he needs you, his fiancée, to convey them. In this case... you might as well make it clear.

Unexpectedly, after hearing this, Mu Liya sighed with disappointment: "Chief Auditor Liu, I know that given the relationship between Mr. Yang and I, it is inevitable that you will have some misunderstandings, but what I want to say is... Mr. Yang was actually very opposed to my initiation of today's internal control work exchange meeting. Although the reason why he did not come today was indeed not because of physical discomfort, it was not what you all thought."

"Let's talk about lighting. Everyone has seen Mr. Yang's attitude towards Dahua Company. In his opinion, there is no need to try to solve the deadlock that the company is facing now. He even hopes that the company will fail to complete its core tasks this year due to the high proportion of sunk funds, so that the entire leadership will be held accountable;"

"Similarly, he also hopes that the more than 300 tertiary industry units under the company will be forced into bankruptcy and restructuring due to excessive hidden debts... Believe me, with Mr. Yang's ability and influence in the administrative system, he has plenty of ways to strip off the businesses and assets of these tertiary industry units layer by layer during the restructuring process, and eventually turn them into small township enterprises, and then add them to the plan of building a rural grassroots complex industry that he has always insisted on!"

! ! ! !
When everyone heard this, they all opened their eyes wide in disbelief.

Nani~! ?
Yang Mo is actually very opposed to holding today's internal control work exchange meeting?

So what you mean is that you initiated this meeting on your own initiative despite Yang Mo's opposition?

Ok……

Although Miss Mu's words sounded absurd at first, after all, she and Yang Mo were already a couple. Even if Yang Mo's strong character was not taken into consideration, as a couple, they should advance and retreat together.

But when you think about it carefully, what Miss Mu said doesn't seem to be a lie.

As she said, Yang Mo's attitude towards Dahua Company, especially the Dongying group which makes up the majority of Dahua Company, can be seen by anyone with eyes. If the senior executives of Dahua Company have a serious capital sinking ratio exceeding the red line and the amount of one-way transfer payments to tertiary industry units is too high, and if there are big problems on both ends before the end of the year due to problems with fund allocation and withdrawal, then Yang Mo will definitely wake up with a smile and clap his hands... Anyway, his achievements are there, and the responsibility cannot be traced back to him. If all the senior executives of Dahua are held accountable, they will inevitably have to rely on him in all aspects. At that time, he can justifiably take control of the company and then carry out a thorough purge.

As for the more than 300 tertiary industry units, Miss Mu’s statement is not groundless.

Who doesn't know that Yang Mo has never managed the tertiary industry units since the first day he joined Dahua Company? With such an attitude of letting them fend for themselves, coupled with the rural grassroots industry construction plan he had been promoting as early as when he was in the drilling company, no one would doubt that he was eager for these tertiary industry units to go bankrupt and reorganize so that he could feast on their corpses.

and so……

Everyone saluted Miss Mu with awe, and many of them couldn't help but sigh in their hearts.

After all, she is Mu Siyuan's daughter. Even though the mountain where they are located has had some minor frictions with Mu Siyuan in the past six months, she still knows where her roots are!

This is actually not that strange. When people reach a certain level, there are often some more fragmented behaviors under the cause and effect system of all parties. This has no necessary connection with whether Miss Mu is engaged to Yang Mo.

Thinking of this, Liu Bo couldn't help but soften his gaze towards Mu Liya. After exchanging a glance with Ding Xiang and the others, his tone softened a little: "Minister Mu, as an auditor, combined with the various situations analyzed before, I can roughly guess why you proposed to hold this meeting today... From my point of view, Minister Mu's general idea is correct. We really need to start with the adjustment of internal control work, so that we can start from another angle and help the company solve the current big problem."

At this point, Liu Bo glanced at the confused looks on the faces of Ding Xiang, Zhuo Mali, Song Wenxuan and others, and crossed his hands on the conference table with some reserve: "However, the general idea is the general idea. Without bursting that bubble, how to adjust and carry out subsequent internal control work is not a simple matter... In this regard, I really want to hear Minister Mu's thoughts."

From Liu Bo's attitude, it can be seen that this auditor general is not in the same group not only with Song Wenxuan and others, but also with Ma Bin, and even with Ding Xiang... Well, of course, it is normal that he is not in the same group with Ding Xiang. After all, this general manager who actually has no power is just a clay Buddha used to take the blame.

Mu Liya also showed respect to Liu Bo: "Auditor General, in fact, after discovering the problems in the company, I kept thinking about how to adjust the subsequent work and how the company can recover from other angles from the perspective of risk control, to ensure that by the end of the year, without misappropriating the budget of the current investment projects, we can ensure that our transfer payments to those tertiary industry units can be maintained at a level that will not cause them to collapse."

Hearing the key words in Mu Liya's words, Liu Bo showed an approving expression, then raised his hand slightly, motioning her to continue.

Mu Liya pondered for a moment, took a deep breath, and then confidently said something familiar: "In my opinion, if the company wants to overcome the current difficulties, it can be done in eight words... separation of duties and rectification of processes!"

Oh?
Separation of duties and process rectification?
Just like Miss Mu when she first heard these eight words from He Yongyi, Liu Bo's eyes showed a thoughtful look, and then his expression became serious. Just like Miss Mu at that time, he said the same words: "Minister Mu, please give me some advice!"

(End of this chapter)