1988: Back to the human world for a few years

Chapter 526: One Step Ahead (1)

Texas looks vibrant in early March.
First, the Momo Baiyao project, which had been in preparation for more than half a year, was officially unveiled, and more than 300 chain stores located in rural areas were put into trial operation at one go, greatly alleviating the inventory and cash flow pressures of major local pharmaceutical companies;

The second batch of exchanges of light and heavy industrial products with the Bear Country was successfully completed. Not only did it clear the inventory of a large number of industrial enterprises, but it also exchanged for a large number of advanced equipment and valuable technologies. With the support of Jincang's pre-payment funds, some enterprises have begun to carry out technological iterations as planned.

Next, two well-known patriotic overseas Chinese families, Chen and Lin, applied for a piece of land near the Dahua Industrial Park and invested in a factory of quite a large scale in the form of a joint venture. On the third day after the land was approved, and even before the groundbreaking, the new factory received an order for the production of 1.4 vending machines... Under great surprise, in order to cope with this order, the competent department of DZ City personally asked when the production line imported from the island country would be in place, and required the construction team to build the factory in the shortest possible time. At the same time, it urged the four local manufacturing companies that had invested in the new factory to prepare the relevant supporting equipment and selected talents, and move the equipment and personnel there immediately after the first phase of the factory project was completed, to ensure that the order could be completed on time and with quality.

What a joke! This is a project with a strong demonstration effect. Once it gets on track, it will immediately surpass the brewery invested by the Chen family in Laiwu and become one of the top three patriotic overseas Chinese returnee investment projects in the Shandong region. It is totally worthy of being singled out by the organization for performance!

It seems that everything in Texas is still the same as last year, developing steadily towards a bright future.

But just after the beginning of the month, the situation suddenly changed. A storm that made all the companies in DZ City shudder began to blow. Not only did a large number of local company leaders suffer from insomnia for several days in a row, even the competent authorities of DZ City were alarmed and held several small meetings in succession to discuss how to deal with this storm stirred up by DZ City Urban Property Fund Company.

So, after three days of urgent discussion, You Yakun, the deputy monitor, finally made up his mind and took several important leaders, including those from the finance and taxation departments, to conduct a work inspection at the DZ City Urban Development Fund Company, which they had only visited once after its listing.

........................

"Mr. Yang, we understand your company's desire for your son to succeed;"

"The city real estate fund has limited funds in its big fund account, and we understand that they want to spend every penny wisely.

"Mr. Yang, you hope to make the best even better and turn the companies on the support list into capable and mighty lions. I personally understand this better;"

"But the problem is..."

"Mr. Yang, Dezhou used to be an old industrial area. Since it is an old industrial area, we need to face up to the various historical issues left over, but we must pay attention to the methods and ways of working;"

"You're taking drastic measures right from the start, or you're cleaning up those companies at this critical moment of business restructuring after delivering orders. Isn't that a bit too... radical?"

You Yakun looked at Yang Mo in front of him and spoke slowly and earnestly, like a senior who cares about the younger generation.

It was no wonder that as the deputy monitor, he had to speak to Yang Mo in such a tone that had nothing to do with being strong. Strictly speaking, this matter was beyond the scope of his authority as the deputy monitor.

They created this storm in the name of "promoting industrial upgrading". The pilot of industrial upgrading in Dezhou was originally the function assigned to the Urban Property Fund Company by the organization.
The companies affected by the storm were also on the first list of companies supported by the Urban Property Fund Company. A considerable portion of the funds for these companies' technological iteration, industrial upgrading, and even business restructuring were paid by the Urban Property Fund Company in various forms.

Therefore, his words "I hope my son will become a dragon" were not nonsense. Since they are on the support list of the Urban Property Fund Company and since they enjoy the unremitting support and priority focus of the Urban Property Fund Company in all aspects, then in a sense, those enterprises are the children that the Urban Property Fund has brought up with great difficulty... at best, they are half-children.

Therefore, it is reasonable and logical for You Yakun not to interfere too much.

But the problem is...

The foundations of these enterprises are still municipal or even provincial units!

If Yang Mo was only doing minor repairs and adjustments, it would be fine. We should choose the lesser of two evils. Since this guy invested money and sent orders, we can just pretend that nothing happened.
However, Yang Mo's knife swing was too fierce this time, so fierce that it was almost unbearable. He really doubted whether he and his men could properly handle the chain reactions brought about by this storm.

So there was no other way. Even though he knew that Yang Mo, this troublemaker, might not pay attention to him because of the power given to him by the organization in this job, he still had to step in person and have a good talk with this guy.

You Yakun's guess was correct. Yang Mo, who had chosen his position long ago, didn't care much about his face. After hearing his actually very gentle advice, he just showed his usual harmless smile: "Mayor You's advice is deafening. We should really pay attention to the methods and ways of carrying out our work."

After a slight pause, the arc at the corner of Yang Mo's mouth began to sharpen: "But what I don't quite understand is... In the past five years, DZ City Xinda Materials Company has participated in three mergers and reorganizations. As a key supported enterprise in the city, it has helped absorb and solve the diversion and employment pressure of employees from brother units. They actually used shell companies to fabricate transactions... This disguised behavior of embezzling support funds from the city and the Urban Property Fund Company, should it be investigated?"

As soon as these words were spoken, You Yakun's expression changed.

Over the past decade, the so-called mergers and reorganizations were nothing more than brother companies helping each other, absorbing each other's laid-off employees, and then moving around to form a new unit; the historical debts are still there, and the problems that should exist basically still exist.

Under such circumstances, most of the "merger main forces" who were suddenly burdened with several times the cost pressure and historical debt pressure would naturally no longer be able to achieve a break-even point as before. However, the expectations from their superiors were still there... Therefore, using financial means to make their own appearance more glamorous and to make their superiors more face-saving became a very common method.

He guessed that there was something wrong with the account books of Xinda Materials Company, and even the previous team must have been very clear about it. Otherwise, no matter how much importance a medium-to-large enterprise holds, it would not be possible for it to still allocate up to 370 million in various support and refund funds every year when the local finances are tight.

It’s just that some things can be said but not done, but there are some things that can be done but not said; once the charges Yang Mo brought against Xinda Materials Company are confirmed, this key municipal enterprise with more than 2,000 employees will be doomed.

"Boss Yang, I'm quite familiar with the situation of Xinda Company. You said that their financial management is not standardized and the data reports have loopholes. That's not surprising... After all, the old accountants in their company are not well educated. In recent years, the accounting standards have been revised and adjusted after a period of time. It is possible that they can't adapt to it all at once."

"but……"

“Using shell companies to fabricate transactions?”

"Mr. Yang, do you think... could it be that your company's auditor made a mistake?"

The person who spoke was not You Yakun, but a key official in the finance and taxation department.

After three months of getting along, everyone knew that Yang Mo was a tough nut to crack. Just relying on You Yakun's face might not make him buy in, so they had to be prepared to argue on business grounds.

Since this storm was caused by the audit, the business elites in the finance and taxation department will definitely not escape the fate of being drafted.

Therefore, even if one was reluctant to confront Yang Mo, after receiving the signal from You Yakun's eyes, one still had to take action.

Yang Mo looked at the middle-aged fat man with a bit of amusement, "Oh? You made a mistake? How about you take a look at the main accounting data of Xinda Materials Company first?"

After signaling with his eyes, Zhuo Junyue, who was acting as the meeting secretary, immediately stood up and presented several documents that had already been printed to everyone.

Yang Mo calmly picked up a document and gestured to everyone: "In 1987, the operating income of Xinda Materials Company was 2078 million; in 1988, it was 1851 million. In 1989, the operating income increased to 2060 million, an increase of 11.32% year-on-year."

“利润总额这一栏；1987年为13.7万，1987年为-263万，1989年为-278.3万元；”

“到了归属股东净利润这一块，1987年为23.1万元，1988年为-240.5万元，1989年为-256.6万元；”

“扣除非常性损益的净利润这一栏，1987年为-180万元，1988年为-232.6万元，1989年为-263.6万元；”

"As for the net cash flow from operating activities, it was RMB 1987 million in 239.6, RMB 1988 million in 179.3, and RMB 1989 million in 317.9, a year-on-year increase of 77.27%;"

"As for total assets, they were 1987 million yuan in 3597, 1988 million yuan in 3279, and 1989 million yuan in 2964, a year-on-year decrease of 9.61%;"

"As for the owner's equity, it was 1987 million yuan in 875.3, 1988 million yuan in 634.7, and suddenly dropped to 1989 million yuan in 378, a year-on-year decrease of 40.43%!"

After reading the data in his hand, Yang Mo looked at the middle-aged man in the finance and taxation department with a fake smile: "Deputy Director Geng, you are a professional... What do you think about these sets of figures?"

The middle-aged man looked a little unnatural, and laughed: "Mr. Yang, since its establishment in 1976, Xinda Materials has experienced several mergers and reorganizations, especially in 1987, when it reorganized the Texas Lens Factory, which was originally suffering from serious losses;"

"As for restructuring, you know that with a lot of non-performing assets and heavy historical burdens, profitability will inevitably decline. It just so happens that we encountered the export freeze period in 1989, and Xinda Materials' revenue for the year fell sharply, so we had to start divesting some of our non-performing assets;"

"so……"

"Considering the actual situation in each year, isn't this report quite normal?"

Yang Mo laughed.

Since it is the financial report disclosed by Xinda Materials itself, it is naturally unlikely to find any problems from the data on paper.

In fact, he was waiting for this reply from the other party.

So he looked at You Yakun as if nothing was wrong, and then turned his attention back to the slightly plump middle-aged man: "Oh?"

After another gesture, Zhuo Junyue quickly took out a much thinner document and placed it in front of everyone, then picked up another report: "This is the operating report for 1990 compiled by Xinda Materials Company at the end of last year... Well, it is very consistent with the financial data for the first three quarters that they submitted when they applied for support from our Urban Real Estate Fund last year, but when compared with previous years, it is very interesting. You can take a look."

Hearing the subtle ridicule and sarcasm in Yang Mo's words, everyone's faces suddenly changed, and they all picked up the report of only a few pages in front of them and started to read it.

People like You Yakun who are not proficient in finance may not have much feeling after reading this report, but as a member of the finance and taxation department, the cadre named Geng suddenly broke out in cold sweat. Yang Mo stretched out his hand and made a gesture of invitation: "Mayor You, Deputy Director Geng, please turn to the second page of the information, which records the business data of Xinda Materials Company in 1990."

After everyone turned to the second page, Yang Mo turned his head and stared at the middle-aged man named Geng: "Deputy Director Geng, I wonder what you think of the operating income of Xinda Materials Company in the first three quarters of last year after reading this document."

"In 1989, the annual total revenue of Xinda Materials Company was only 2060 million yuan. In the first quarter of 1990, its quarterly revenue soared to 987.8 million yuan. In the second quarter, it soared to 1066 million yuan, and in the third quarter, it soared to 1656 million yuan."

After reading out such a series of extremely exciting data, Yang Mo smiled meaningfully: "If Xinda Materials' performance last year was very good, there would be nothing wrong with such operating data... After all, every industry has its own seasonal sales peak period, and it is not particularly unusual for three quarters to account for almost the entire year's revenue;"

"But the problem is, as far as I know, the main products of Xinda Materials are LED screens, electronic lenses, and small-size display screens. The sales gap between the off-season and peak season for these products is not that obvious;"

"Besides, the return rate of Xinda Materials' products has always been high due to quality control reasons... I am very curious, how did they achieve such rapid revenue growth before participating in the light and heavy industrial product exchange plan led by Chengchan Fund and Dahua Company in the fourth quarter and without prepaying sales proceeds through Jincang?"

The middle-aged man surnamed Geng had an extremely unnatural expression, and laughed, "Boss Yang, although the overall economic environment was not very prosperous in 1990, non-governmental organizations from various countries have also started their ice-breaking journey to China. Although the quality control of Xinda Materials Company has always been an issue that cannot be avoided, its advantage is that its products have high technical content and the demand in the overseas market is also relatively large... Benefiting from the recovery of the overall environment, the turnover has suddenly shown explosive growth. It doesn't seem to be something particularly difficult to understand, right?"

Yang Mo raised his mouth in a strange arc: "Oh? But according to the data we got, similar companies of the same size in Tianjin did grow in the first three quarters of 1990, but their month-on-month growth was only about 20%, and their quarterly revenue was generally between 400 and 600 million."

"Haha, although the small-size screen manufacturing industry in Tianjin is similar to that in Texas, their lens industry and LED screen industry are currently stronger than those in Texas... Even similar and large companies in Tianjin that have both industrial and location advantages have not achieved such amazing results. How can Xinda Materials suddenly achieve such good revenue results?"

When the middle-aged man heard this, the corners of his eyes began to twitch.

Although Yang Mo's words may sound like he is using the most annoying "empiricism" to deny the revenue data of Xinda Materials in the first three quarters of 1990, in fact, this is one of the characteristics of financial fraud that must be checked during an audit.

Once a company's main assets and revenue grow abnormally and the growth rate is much higher than the industry average, it can be counted as an abnormal financial characteristic.

"Well...haha, we should actually thank Mr. Yang, Dahua Company and the previous leadership team for creating a good business environment for DZ City. Thanks to Dahua Company's strong market appeal, Xinda Materials' performance has grown by leaps and bounds in the first three quarters of last year. It's not incomprehensible!"

The middle-aged man surnamed Geng used a trick of using just a little force to achieve a great result. He didn't quite believe that Yang Mo had obtained concrete evidence in such a short time... Since there was no evidence, and they were only judging some problems through abnormal financial manifestations, then there would be room for a war of words.

Yang Mo's face did not show any fluctuations. He just smiled and glanced at him: "According to our audit and evaluation, the long-term asset structure of Xinda Materials is abnormal... The debt receivables of non-core tertiary industry projects and its business-related enterprises account for as much as 36.7% in total, and the company's own long-term equity investment and goodwill account for as much as 31.2% of total assets, but the fixed assets related to its core business account for only 22.1%."

The middle-aged man surnamed Geng almost burst into a curse. What a bunch of idiots. They actually showed such a low proportion of fixed assets related to the main business on the books. Are their accountants stupid?!
The smile on his face was just as bright: "Hey, Mr. Yang, you are being too harsh on them. In order to get out of trouble in recent years, large-scale enterprises in various places have been trying to diversify their development... Xinda Materials does not have a talented leader like you, Mr. Yang. It is understandable that they lack experience, take some detours, and neglect their main business too much!"

Yang Mo pursed his lips, picked up the information in his hand and pointed to a column: "But they have a large amount of prepayments of more than 1100 million on their books, and accounts receivable also exceed 1300 million; at the same time, their inventory turnover rate is also significantly higher than the industry average, even reaching 27.3%... I wonder what Deputy Director Geng thinks?"

The middle-aged man surnamed Geng suddenly broke out in cold sweat on his forehead. He wished he could pick up a stool and rush to the Finance Department of Xinda Materials Company, then pin their Vice President of Finance to the ground and beat him up.

I know you were hoping to get the support money from the Urban Development Fund Company, but even if you want to commit financial fraud, please do it decently!

Do you think the Urban Real Estate Fund Company is the same as those cooperative enterprises you have seen before, with no financial knowledge at all?

They are much more professional than you. You made the financial anomaly so obvious. Do you think they are blind?
At this moment, the middle-aged man surnamed Geng felt that the worst thing he had ever done in his life was that he did not let the business elites in the department sneak past and personally instruct the group of idiots at Xinda Materials Company on how to modify the account books perfectly.

Thinking of this, he looked at You Yakun with a somewhat stiff expression, and his voice became a little more dry: "Well, Mr. Yang, Xinda Materials Company is a municipal state-owned enterprise after all. The business environment has suddenly improved. It is understandable that there are some triangular debts between brother units that are difficult to collect directly!"

Hearing this excuse that even a fresh graduate wouldn't believe, Yang Mo didn't embarrass him too much. He just smiled and continued to point to the next column: "For the same LED blue light screen, the average gross profit of peers in Tianjin is 37.6%, while the statistics of Xinda Materials are 62.2%, almost twice as high. How to explain this... Could it be that they are using the method of using credit to offset the raw materials of upstream companies to resolve and hedge the triangular debts between them and their sister companies?"

The middle-aged man surnamed Geng: “…………”

Yang Mo: "Also, the freight and revenue of Xinda Materials have not grown synchronously, and even the conversion difference ratio has reached 74.6%. I want to know what Deputy Director Geng thinks about this?"

Middle-aged man: “…………”

Yang Mo: "Well, maybe Deputy Director Geng meant that the transportation company itself, or their affiliated companies, were also deeply mired in the triangular debt quagmire with Xinda Materials, so it is understandable that some methods were used to offset the expenses and they were not recorded in the books... But Xinda Materials has high deposits and loans, and even borrowed 11 loans from Dezhou Bank in half a year, with a total amount of funds as high as 841 million yuan. How do you explain this?"

Yang Mo couldn't help but show a trace of sarcasm on his face: "If the revenue data of Xinda Materials last year is true, and the DZ City banking system itself has no pressure to lend, I would like to ask Deputy Director Geng to explain why they borrowed so much money and why they deposited the money in the bank to swipe the bank account?"

"Both the cash flow from financing activities and the cash outflow from investing activities have increased, but the cash flow from operating activities is different from the net profit, and the difference is so obvious...I'm afraid it's a bit unreasonable, right?"

The middle-aged man surnamed Geng sat there like a piece of wood: “…………”

Yang Mo saw his reaction and roughly understood the old man's attitude towards some things. He sighed and said, "What I just said are only some of the financial abnormalities of Xinda Materials. Their non-financial abnormalities are countless;"

“For example, in the first three quarters of last year, the growth rate of output was much greater than the growth rate of fixed assets;”

“For example, in the first three quarters of last year, the proportion of production personnel was higher than that of the same industry, but the proportion of R&D personnel was significantly lower than that of the same industry;”

“For example, their major customers and suppliers (advance payments) include related parties or suspected related parties;”

“For example, their customer size characteristics and transaction size in the first three quarters of last year did not match;”

“For example, the scale characteristics of the invested unit do not match the valuation (investment cost), and so on and so forth…”

At this point, his eyes slowly swept over You Yakun, and Yang Mo's voice was gentle as if without a trace of emotion: "I guess there is no need to explain these things in detail here, right?"

The conference room was dead silent for a while. A glimpse of You Yakun's ugly expression came from the corner of his eye. The middle-aged man named Geng gritted his teeth and said, "Boss Yang, although there are indeed many abnormal manifestations of Xinda Materials, in the final analysis, many of them are due to the characteristics of its municipal state-owned enterprises and some objective historical legacy environments in the old industrial zone. This is just a misunderstanding;"

"In the final analysis, Mr. Yang, you are only speculating based on the symptoms. Without definite evidence, it is inappropriate to directly conclude that Xinda Materials Company used a shell company to fabricate transactions, right?"

"After all, they are key municipal enterprises. If they are misjudged, the impact will be extremely bad and will cause strong dissatisfaction among the people!"

It was obvious that the middle-aged man surnamed Geng could only use empirical evidence to prove his point, and warned Yang Mo implicitly that if he really put those four taels of stuff on the scale, it would not be a good thing for him.

If nothing unexpected happens, as long as Yang Mo gives in now, within a week, Xinda Materials Company will submit a new financial statement that has been reorganized and checked. By then, all the above-mentioned loopholes will no longer exist.

In fact, if Yang Mo hadn't had other intentions, he would have let it go today; even if it was Ye Tao instead of You Yakun who came here today, he would have stopped here today;
It's just a pity that since the day he became the head of the Urban Property Fund Company, Yang Mo has completely walked on the tightrope, so there are some things that he can never step back from.

and so……

Yang Mo stared at the middle-aged man whose job title was one level higher than his for a long time, then he suddenly smiled: "Mayor You, Deputy Director Geng, you mean that only if we can produce key hard evidence, the city will allow us to carry out the subsequent divestiture and offset of Xinda Materials' non-performing assets?"

A layer of cold sweat broke out on the forehead of the middle-aged man named Geng, but he did not dare to speak.

A number of companies including Xinda Materials Company were subject to surprise audits, which not only affected the city's reputation and subsequent punitive debt offsets, but also the divestiture and offset of various assets... Anyone with a brain knows how huge the room for maneuver is here.

The latter is actually the main reason why people like You Yakun can't sit still.

And although he is one level higher than Yang Mo in terms of job title, and is a member of the prestigious Finance and Taxation Department, everyone in the system knows that the Finance and Taxation Department is like a god in heaven with the power of life and death for ordinary people and private enterprises, but in fact, in the system, it is only in the awkward third tier... To put it bluntly, it is the one who suffers and does the hard work, and the little power in his hands is of no use to people in the same system.

Therefore, at You Yakun's glance, he certainly dared not rush out to be the vanguard; but if he really encountered a scene of a fight between gods, he was absolutely unwilling to be caught in the middle and be cannon fodder... Yang Mo's rank is not scary, and the authority of the Urban Property Fund in the area of ​​urban construction investment is not scary, but the functions and special reporting rights granted by their organization, the large fund used for experimental industrial upgrading in Texas, are extremely life-threatening.

Seeing that the middle-aged man surnamed Geng was silent, You Yakun sighed: "Boss Yang, you have to understand us. After all, Xinda Materials Company is a key support unit of the city. If you accuse them of financial fraud without key evidence, it will cause big trouble!"

Hearing this fellow's certainty that he couldn't produce evidence right now, as well as the extremely obscure threat, Yang Mo laughed even more heartily: "Actually, I didn't want to produce it, but since Mayor You finds it difficult to do so..."

"Well, since the city needs evidence to explain to the organization and the masses, then... I'll give you the evidence!"

After saying that, Yang Mo made a gesture. Zhuo Junyue, who was experiencing such a situation for the first time, put down his pen with a pale face, then stood up with a slight trembling, opened the door of the conference room, and trotted straight to the confidential room.

In less than three minutes, Zhuo Junyue came back, panting softly, and carefully placed several stacks of file bags sealed with red thread in front of You Yakun.

When You Yakun saw the familiar and special red binding rope, and then looked at the red ink on the opening of the file bag, he couldn't help but frowned.

At Yang Mo's silent signal, he used a pen to pick up the ink, untied the rope on the file bag, and took out the information inside to take a look.
Suddenly, his expression changed...

(End of this chapter)