What's wrong with me being a rich man?

Chapter 664 Considerations (4k)

Deng Ning, the senior lawyer who had handled the Mountain Peak litigation, received a call from BaFin and temporarily canceled his flight to Shanghai.

Not long after, Yu Xing also received a call from BaFin President Hufeld.

Although BaFin was the main force that investigated the mountain, and although the other party had a team that came to Hong Kong to look for him, this was indeed the first time he had received a call from this department boss.

Perhaps due to stereotypes, Hufeld's pronunciation sounded harsh, but his remarks were more moderate. In addition to still hoping that Yu Xing would cooperate with the investigation, he also mentioned that BaFin was considering the potential impact of formal criminal proceedings on the two innocent listed companies, Silicon Carbon Group and Baixiaosheng.

Yu Xing initially thought there was a problem with the wording used in the translation, but after checking it again, he realized that the other party had indeed used the word "innocent".

The two listed companies are indeed quite innocent, having been saddled with such a founder.

In fact, with the stern signals released by the media and the EU investigation team, the share prices of both Silicon Carbon Group and Baixiaosheng have fallen to varying degrees in the past half month. The former, in particular, is listed on the special board of Hong Kong's Growth Enterprise Market, and its share price, which has been below its issue price since its listing, has fallen from a fluctuating HK$72 to around HK$67.

In other words, the stock price of Silicon Carbon Group has already fallen by 10%, and this is considered a small drop, as institutional and retail investors were already aware of the troubles the major short sellers were facing.

However, if BaFin completes its investigation and decides to transfer the case to German prosecutors to initiate criminal preparatory procedures, then Interpol's red notice, a global asset freeze order from the European Court of Justice, and, in accordance with bilateral agreements, requests for judicial assistance from Hong Kong may arise.

This will have a comprehensive impact on listed companies.

Hong Kong and Germany have a bilateral agreement. Theoretically, if things get to that point, Yu Xing could be detained in Hong Kong. If he is unable to enter Hong Kong to perform his duties, the Hong Kong Stock Exchange can require the board of directors to appoint an interim CEO within seven days on the grounds that "the core management personnel are unable to perform their duties normally, resulting in the failure of corporate governance." Otherwise, it will directly initiate a mandatory suspension procedure.

Other unfavorable factors, such as questioning the "good character and integrity" of the actual controller and demanding the company to remove them from their positions, can be addressed later.

Criminal proceedings are a very serious and unfavorable undertaking. Although there are still many procedural maneuvers due to regional differences, the best course of action is to avoid this stage altogether.

Yu Xing had a calm exchange with Hufeld, reiterating his position and completely denying the allegations made by BaFin. He also pointed out that the problems faced by automakers like Volkswagen were caused by their own fraud.

"Don't you have anything to do with those offshore funds?" Hufferd's voice suddenly turned serious.

Yu Xing categorically denied it: "No!"

Huffert raised his voice again: "We have tracked a lot of fund flows, and the Cayman Islands will transfer information about these funds. Yu Xing, do you think the flow of funds raised by Red Falcon Capital and Today Capital can be completely kept secret?"

BaFin thoroughly researched Yu Xing's career path and the sources of his funding. Among them, they identified two of the most suspicious institutions as Red Falcon and Today Capital, whose bosses also had close ties with Yu Xing.

It is currently believed that once the locked Cayman funds are decrypted, more indicative evidence will be found within them.

Yu Xing felt a pang of anxiety when he heard the name Red Falcon Capital, but then he found it rather strange when he heard Today Capital. This matter... BaFin is a very serious institution, please don't do anything inappropriate.

He still categorically denied it: "I don't know what you mean by bringing this up. The financing of Silicon Carbon Group is completely legal and compliant. Guoshanfeng is just an independent third-party research institution. Even the hedge fund will not be established until next month. You can't forcibly label innocent and clean research institutions as market manipulators and insider traders just because of regional protection!"

Even as the conversation was about to stall, Hufferd did not forget the purpose of the call.

He softened his tone: "BaFin will investigate the matter thoroughly, but Deng Ning told us that you, Guoshanfeng, also have evidence of other institutions manipulating the market. If that is indeed the case, BaFin can consider temporarily not transferring the case to the prosecution and make this public."

Huffert directly stated the treatment he wanted over the mountain peak, but also added the restriction of "temporary".

"This point will be fully communicated between Deng Ning and you. I can only say that Guoshanfeng and regulatory agencies are not adversaries. What we always insist on is exposing those fraudulent acts that violate the law. BaFin is looking for illegal activities such as market manipulation and insider trading, and Guoshanfeng is doing the same." Yu Xing presented the consensus.

The communication between the two was thus completely eased.

After stating BaFin's position for a while, Hufferd finally brought up another matter, saying in a casual tone: "Also, my colleagues noticed that Guoshanfeng seems to be shorting our German listed companies again while facing investigation, still anonymously, and still without disclosing the short positions, which could very likely lead us to misjudge you."

Yu Xing gave a barely perceptible smile on the other end of the phone and replied, "That's a rumor. Guoshanfeng hasn't made any moves, and I haven't used any other institution's name to short sell. BaFin can't believe such a thing."

Huffert breathed a slight sigh of relief: "You should know your influence over the financial markets. Since it's not true, you should clarify this issue to avoid impacting Frankfurt and causing losses to an excellent German listed company, which is not what we want to see."

Yu Xing gave the response the other side wanted: "We are planning to clarify this issue before the German market opens on Monday."

The next second, he added, "However, my colleague also became interested in the company Vilcard today, and I believe that Guoshanfeng can clear the company's name."

Hufferd's brow, which had just relaxed, furrowed involuntarily.

For a moment, he almost suspected that the Easterner opposite him knew something, but he couldn't ask him directly.

Will the interest of those who have crossed the mountain peaks clear a company's name?

Hufferd fell into an unspeakable silence.

He then realized he shouldn't have remained silent and said tactfully, "BaFin wants to see market stability and that the interests of companies be protected. Guoshanfeng needs to face up to its influence. Mr. Yu, even if you want to develop your company's business, you should start from the perspective of expanding the silicon carbon group. I would rather see your company's cars in Germany in the future than see another report that disrupts the healthy market."

The call ended quickly.

Hufferd kept the recording of the phone call, first sending a copy to Marcus, and then dialing the other party's number again.

He asked a question: "How much of the short-selling report on ZR is true?"

“Almost all of them are fake!” Marcus, president of Vilcard, said with certainty. “I can’t say they are all fake, but financial markets often take advantage of the slightest oversight to amplify their attacks. Southeast Asia is a complex emerging market, and we sometimes encounter problems in our expansion there, but they are eventually resolved.”

Hufferd and Marcus had a quid pro quo, but it's unclear exactly how much trouble Vilkard has.

He warned, "Vilcard should take care of his own business. Yu Xing said his colleagues are interested in you, which is not good news. You'd better get Vilcard to give up on their pursuit."

Marcus feigned nonchalance: "It's not a big problem. As long as ZR isn't backed by Guoshanfeng and the market doesn't blindly believe the rumors, everything else is minor." Hufferd didn't entirely believe him, but he felt that Guoshanfeng's interest was like a gleaming, cold-blooded bayonet.

Fortunately, BaFin also wields a bayonet aimed at Yu Xing.

Huffert relayed this communication to Vice President Legler: "This issue still needs to be properly resolved. Fortunately, we can make him think twice. Yu Xing should know our strong protective stance towards German listed companies."

After thinking it over, Legler said, "Then I will fly to Shanghai for a face-to-face meeting to discuss our efforts to combat institutional market manipulation and our protection of German companies."

Hufferd nodded, agreeing that a face-to-face meeting would be more prudent.

……

"Fortunately, we can make him think twice."

Yu Xing held a seminar on the seventh floor targeting the German listed company, Vilkald, and mentioned the unusual actions from BaFin.

Whether there's a problem or not, this test will reveal it.

Why can cutting grass scare away snakes? Because there really are snakes in the grass.

"When Hufeld spoke to you for the first time, Legler conveyed his stance to Dunning. It's likely that both of their presidents, the chief and deputy, have vested interests with Vilkader." Liu Wanying, who also attended the small meeting, added, "If that's the case, their shady dealings are probably even more extensive."

Seeing the discussion veer towards the German institution, Li Song steered the conversation back on track: "So what do we do now? Ren Ping has already flown to Malaysia. If we do manage to gather evidence, how do we talk to BaFin?"

The chips obtained through Vilcard were intended to protect the mountain peak, but they unexpectedly proved effective quickly.

“Vilcard is our implicit bargaining chip for maintaining normal communication with these two presidents,” Yu Xing said. “The investment bank’s manipulation of the silver market is our overt bargaining chip for maintaining negotiations with BaFin. Let’s resolve the lawsuit against Guoshanfeng first, and then we’ll look at the issue of Vilcard.”

BaFin operates in principle according to German law, but in reality, it is largely driven by the preferences and interests of those in charge.

The abnormal protection afforded to Vilkad has already proven this point.

Li Song nodded silently.

At this moment, Liu Wanying said, "Once the lawsuit against Guoshanfeng is settled, we can still take advantage of the situation and stab them in the back. Li Song, don't you have some real research?"

Li Song felt the cold glint in President Liu's eyes and said, "Uh," "Mine is practically the same as not having one."

“This company doesn’t need to go through the mountain peaks to take action. I think ZR’s short-selling report is actually quite comprehensive,” Liu Wanying pondered. “Ren Ping and Liu Jiankai’s investigation was largely based on ZR’s report. The current rumors may have already attracted the interest of more institutions.”

Li Song also noticed this.

Over the mountain peak is like a shark in the financial market; when it appears, other sharks swarm in as if they smell blood.

If the target does indeed bleed, it may face significant problems if it fails to cross the mountain this time.

At 7 p.m. German time on Sunday, an official statement from Overpeak finally arrived, denying rumors of using short-selling reports issued by ZR and also denying the establishment of short positions in the company Vilkader.

The official denial has left many people quite disappointed.

Earl, the real short seller, thought long and hard after seeing the clarification. He couldn't help but find the number of the company under the big short seller and hurriedly said after calling through a street phone booth: "Wilcard is really fabricating, ZR's short report is real."

The call was transferred to the secretariat, and the content was ultimately relayed to Yu Xing by Zhang Yangxu.

Yu Xing found it somewhat amusing: "This might really be a call from ZR. If we take action, BaFin gets anxious; if we don't take action, ZR gets anxious."

Zhang Yangxu wholeheartedly agreed; the number came from England and went straight to Wilcard without any beginning or end.

The other side might be trying to lure the snake out of its hole, but the snake crossing the mountain peak has its own considerations.

Over the weekend, the news on foreign websites was denied by the parties involved as soon as it stirred up a ripple, and the excitement in domestic public opinion was short-lived. However, just as Liu Wanying observed, the peak did not appear, and other short sellers also noticed the abnormality of Wilcard, a listed company.

Two days is enough time for short-selling firms to carefully analyze ZR's 60-page short-selling report.

Short seller Chanos tweeted: "The Germans should really investigate Wirkard. The research on ZR is definitely not hasty; it's definitely being done by a seasoned short-selling firm."

He also denied the rumors about Guo Shanfeng, saying, "President Yu, if it really is you, then don't deny it. If it's not you, you should still take a good look at this report."

Yu Xing ignored this colleague who was spreading negative rumors about the silicon carbon group.

However, Chanos was not the only one speaking out against Wilcard; the appearance of multiple short sellers prompted a strong reaction from BaFin.

Wilcard's share price continued to fall on Monday's opening day, dropping by nearly 10 points.

The very next day, BaFin announced a two-month short-selling ban on Wilcard, citing the need to protect market stability. Such a move targeting a single stock is undoubtedly very rare.

It prohibits global investors from establishing or increasing new short positions in Wilcard, including in stocks and derivatives.

“Payment companies like Vilcard are of economic importance, and we must protect them from short sellers,” BaFin Vice President Legler explained in a media interview, emphasizing the necessity of the ban.

Seeing this reaction, Yu Xing further assessed the depth of the entanglement of interests between the two sides; they were practically inseparable.

(End of this chapter)