Those Years When I Was Forced to Top the Forbes List

Chapter 389 The White Knight
Chen Xuebing never forgot that he had a rival in the shadows.

Tomorrow Group.

The dispute over Xinhua Trust disrupted Tomorrow Group's debt laundering plan. Its trust license also carries 6.2 million yuan of hidden guaranteed debt, and the lender and borrower of this debt should both be in the hands of Tomorrow Group.

If the borrower defaults and absconds, the debt will be borne by Xinhua Trust (now Changzheng Trust), and the Tomorrow Group's lenders can then use the IOU to collect the debt.

He could never repay this fabricated debt. During this time, he had also been having Kan Zhidong secretly collect various pieces of evidence of Tomorrow Group's violations in order to retaliate.

By sheer coincidence, he found one of the original Tomorrow Group shareholders of Xinhua Trust, who actually held 1.2% of the shares in China Minsheng Bank.

This asset lead is significant. Minsheng Bank currently has a total share capital of 101 billion shares, a current share price of 12 yuan, and a total market value of nearly 1200 billion yuan. 1.2% is 14.4 billion yuan. If a lawsuit can be filed to shift this hidden debt exposure to the original shareholder, his guarantee obligation will be cancelled.

But Kan Zhidong discovered something amiss and continued his investigation, discovering that this company was merely one of the Tomorrow Group's controlling accounts for Minsheng Bank.

Upon further investigation, shell companies such as Zhejiang Hengyu and Shanghai Yili were found. These 12 related companies collectively controlled 4.8% of Minsheng Bank's shares, which is close to the shareholding of Liu Yonghao, the original major shareholder of Minsheng Bank.

Chen Xuebing's first instinct upon hearing the news was that it was definitely more than 4.8%.

Since 4.8% does not exceed the threshold for mandatory disclosure of shareholding, nor does it exceed the conventional control limit for national banks, there is no need to engage in this kind of underground related-party holding if one wants to hold 4.8% of Minsheng Bank's shares.

This may just be one holding company; there could very well be another group, or even two, that he is unaware of.

The Tomorrow Group's control over people's livelihoods is therefore terrifying.

The major shareholders, such as New Hope, Oceanwide, and Orient, likely did not receive as much as the consortium of Tomorrow Group's circulating shareholders.

They may have secretly controlled some of the decisions that affect people's livelihoods.

Chen Xuebing instructed Lao Kan to use his connections to continue the investigation, which indeed uncovered a 06 billion yuan credit line from Minsheng Bank to Tomorrow Holdings in 30, as well as a 3.38 million yuan loan from a Tomorrow Group-affiliated company that held shares in Minsheng Bank.

This is only what he was able to find out; there are countless other related loans that he couldn't uncover.

He couldn't find out the loan details, but without even thinking about it, he knew it must be illegal.

From his perspective, if Gu An controlled the decision-making of a bank, he could easily make a multi-faceted profit from the loan business.

The first benefit is access to unsecured personal loans, which are borrowed from depositors.

Secondly, they can use their subsidiary, Changzheng, to borrow interbank funds through trusts, which are obtained through interbank certificates of deposit, i.e., money from other banks.

The third method is pledging: pledging the controlled shares of the bank to other financial institutions to get the money back from the acquisition.

By spending 100 billion to control the decision-making of a bank, and with leverage at its maximum, one can recover more than 200 billion in loans.

Of course, it's not that they won't pay back; the Tomorrow Group must have excellent credit to operate such a large Ponzi scheme.

However, the funds they obtain from banks are at an ultra-low cost of four or five percent. With the current economic development, getting money from banks is a sure way to make money. As long as the cost is low enough, what can't they invest in and make a profit? And with control of the banks, they can even make a few percent profit by investing in those internal wealth management products with 8 or 10 percent returns and then cashing out!

What if we invest in real estate?
Over the years, they may have earned several times their initial investment.

It's highly unlikely that the board of directors wouldn't know about this system.

At least those in power certainly know.

Once this matter is exposed, someone will have to take responsibility, and it will be a huge regulatory responsibility. First, they turned a blind eye to related shareholdings, and second, they turned a blind eye to related loans. Therefore, Chen Xuebing directly mentioned the Tomorrow Group's related shareholding and questioned it in his tone.

To everyone's surprise, Liu Yonghao stared at Chen Xuebing's expression for a long time before denying it outright: "President Chen, I don't know what you're talking about. I stopped being the vice chairman of Minsheng Bank in January of this year. Now I'm just a director, and I may not be able to continue in this position."

Liu Yonghao felt a little strange at this moment.

What does this young man want to do?
Trying to threaten him?

He certainly knew that Tomorrow Group was secretly controlling Minsheng Bank, and that it was not just 4.8%, but 8%, and that they were continuing to increase their holdings.

Because most of the 57.4% of the circulating shareholders do not have voting rights (those holding more than 10,000 shares have voting rights), the Tomorrow Group's actual voting rights are nearly doubled.

but.

The Tomorrow Group is on Chairman Dong Wenbiao's side!
Since Dong Wenbiao was parachuted into Minsheng Bank, he has had disagreements with him on development strategies. Dong Wenbiao strongly promotes the transformation into an investment bank and takes an aggressive approach, while he advocates serving agriculture, rural areas and farmers, which is more in line with New Hope's industrial background.

Most importantly, he dislikes shareholders asking Minsheng for related loans, as this would put his investment at risk. He holds a 6% stake in Minsheng, which is worth billions of yuan.

Dong Wenbiao, however, felt that the repayment of the shareholder loan had never been a problem and that it was a high-quality loan, so why not take it?

Moreover, Dong is now seizing this opportunity to win over Tomorrow Group's hidden holdings, Oceanwide Holdings, and senior executives' shareholdings. In the last board meeting, he controlled 68.7% of the voting rights. He then turned around and brought in Oriental Group, which had previously opposed him and wanted related loans but turned against him because they couldn't get any benefits. In addition, some foreign capital only controlled 31.3%, and they didn't even get a veto right.

With the board of directors reshuffling this year, he may lose two of his original three seats.

He was already disheartened and ready to switch to Industrial Bank, but now someone is threatening him with insider trading.

He didn't approve it!
Are you planning to help him?
He was hesitant and uncertain.

Chen Xuebing naturally had his own plans, but his first priority was to resolve Liu Yonghao's attitude towards him.

He took a file folder out of his briefcase and practically shoved it into Liu Yonghao's hand.

"Mr. Liu, please take a look first."

Liu Yonghao hesitated for a moment, then opened the document and looked through it.

When Chen Xuebing saw him open it, he laughed and then explained, "According to the shareholder register of Minsheng Bank, the contact addresses in the account opening information of the 12 Tomorrow Group-related accounts all point to the 7th floor of Tomorrow Square in Shanghai, which is the office of Minsheng Bank's headquarters, right? Such obvious connections have not been marked by Minsheng's compliance department. Mr. Liu, don't you think you should do something about this?"

The bag contained shareholder information, transaction records of stock purchases on the secondary market, information on related-party transactions, and documents regarding loan credit granted to it by Minsheng Bank.

The evidence and logic are already quite sufficient. As long as the China Securities Regulatory Commission (CSRC) investigates, it will definitely be able to find traces.

Since you say you don't know, then I'll let you know now.

As a bank shareholder, knowing about such matters but turning a blind eye constitutes a legal responsibility.

Upon seeing this document, Liu Yonghao was certain that the other party harbored at least three malicious intentions. The document covered a considerable period of time, indicating that it must have been obtained through a long and sustained investigation.

This indicates that the other party did not obtain the information by chance, but rather through deliberate investigation.

Seeing that his expression had become somewhat unfriendly, Chen Xuebing smiled and said, "President Liu, don't misunderstand. Tomorrow Group and I have a dispute over a trust license. I only learned about Chongqing Xinhua Trust by chance when I was investigating them, you know?"

This explanation is to establish the basic atmosphere of the conversation.

Upon hearing this explanation, Liu Yonghao's expression softened slightly. Since the other party offered this explanation, it might not be directed at him.

He waved the documents in his hand and said seriously, "President Chen, thank you for providing the information. I will submit it to the chairman."

He wouldn't ask the other party's purpose at this time, nor would he follow their lead. Preventing being recorded is a basic quality of a great entrepreneur.

Shifting blame is also an option.

Since the information has been given to him, he might as well pass it on to Dong Wenbiao. If Dong Wenbiao doesn't handle it, then that's Dong Wenbiao's responsibility.

As for why he didn't use this information to launch a counterattack against Dong Wenbiao?

The reason is simple: it's not good for him.

His past shareholdings also included related-party illegal controlling stakes that were not disclosed to the authorities.

Moreover, what can he, as a major shareholder, gain by spreading negative news about people's livelihoods?
The forced reduction of holdings by Tomorrow Group and the handling of illegal loans will inevitably cause a sharp drop in Minsheng Bank's stock price, which will be even less beneficial to his idea of ​​reducing his holdings in Minsheng Bank and increasing his holdings in Industrial Bank.

Chen Xuebing could certainly guess his position, and he wouldn't let him pass the buck so easily.

"Alright then, actually I just wanted to retaliate against Tomorrow Holdings, not to go against Mr. Liu. So I'm handing this document over to you. I'll wait for Mr. Liu's decision. If there's no announcement in three days, I'll submit this document to the China Securities Regulatory Commission and the China Banking Regulatory Commission."

Chen Xuebing picked up his bag and prepared to leave.

Liu Yonghao's eyes flickered, sensing that this matter was not easy to deal with.

He also felt a surge of anger within him.

Damn it, I told you long ago not to do related-party loans, and now they've caught us red-handed! "President Chen!"

Liu Yonghao stopped Chen Xuebing just as he was about to leave.

Chen Xuebing turned to look at him.

Liu Yonghao's lips moved, but he still cautiously said, "Tomorrow, let's find a place to have a cup of tea?"

Chen Xuebing knew what he was wary of, so he spoke very directly: "President Liu, let's skip the tea and get straight to the point. I want to be the largest shareholder of Minsheng Bank, exceeding the policy shareholding limit by 5% and reaching the special approval limit of 10%. In addition, I want two board seats. This requires the support of all shareholders."

Liu Yonghao could no longer hide his shock.

A 10% stake in Minsheng Bank would cost 120 billion yuan at the current share price.

Moreover, aside from the fact that ordinary shareholders cannot vote, this shareholding gives them nearly 20% of the actual voting rights in Minsheng Bank.

What is he doing?
“I will support you in continuing as vice chairman, and I will also support your proposal to eliminate related-party loans,” Chen Xuebing continued, his tone enticing.

Liu Yonghao's eyes were still full of distrust as he looked at Chen Xuebing.

Chen Xuebing suddenly smiled: "Drinking tea is no fun. I recently got a membership at the Water Club. Let's go for a sauna after you get off work?"

Liu Yonghao hesitated for a moment, then finally nodded.

Two hours later.

In the sauna, two shirtless men, each wearing only a thin pair of sauna pants, were dressed in their own clothes.

Let's be frank and open with each other.

The equity issue of China Minsheng Bank certainly warrants such a grand undertaking by the two major bosses.

"hiss"

A ladle of water was poured over the ore, and mist immediately rose up.

Chen Xuebing, who has a muscular build, doesn't have prominent abdominal muscles, but when he lifts up an hourglass and turns it upside down, the muscles on his waist are very defined and give him a strong presence.

Fifteen minutes in an hourglass is the standard time for a steam room, more than enough time for everyone to complete a conversation and establish key intentions.

"President Chen likes to exercise," Liu Yonghao added, seemingly uninterested in digressing.

"Hmm." Chen Xuebing nodded and sat down next to Liu Yonghao with an air of nonchalance.

"They're so young after all," Mr. Liu remarked.

Chen Xuebing chuckled: "I heard that since General Manager Xie of Zhongzhi Group entered the financial field, he only recruits young people born after 1980, believing that young people have enough drive. I agree with that point. However, with me at the helm of our group, we have more than enough drive. So I like to communicate with people born in the 50s and 60s to absorb some of their composure."

In 2001, Xie Zhikun of the Zhongzhi Group officially entered the financial field by reorganizing Harbin International and renaming it Zhongrong Trust. He controlled the equity of multiple investment companies and indirectly held multiple entities, gradually expanding his influence.

Zhongzhi, Tomorrow, Oceanwide, Fosun, Anbang, and other capital groups from later generations are all quietly rising. In terms of the number of financial licenses they control, they all have more than 10 licenses. Currently, they are all hidden behind the scenes through various indirect shareholdings and are not well-known.

Liu Yonghao certainly knew this, because after he entered Minsheng Bank, he became a force to be reckoned with, but although the roots were deep, the leaves were not lush.

Chen Xuebing's Long March yielded exceptional profits, enough to shock countless people. But what's even more shocking is the truth: if the profits of some capital groups were revealed, they would be no less than those of Long March.

The secret lies in financial leverage.

According to his understanding, Tomorrow Group's capital leverage exceeds ten times.

What does ten times mean? It means having 1000 billion in net assets and holding 100 billion in investments.

Of this 100 billion, only about 5 billion is the cost of capital each year. If the return is only 20%, the total return will exceed 15 billion.

The following year, with a net worth of 2500 billion, and still using ten times leverage, the investment amounted to 250 billion.

This isn't even the most outrageous part; Anbang Group's leverage ratio exceeds 15 times, and CEFC Group's exceeds 20 times.

How did you play it?

They control several banks and then use various financial licenses to attract bank deposits.

One fish, three ways; then three more times; then three more times—two or three times the leverage, enough to make two or three rounds of leverage in a year.

Ordinary businesses operate on addition, but these businesses operate on exponential growth. How can you possibly compete?
As long as the macro market continues to rise, they can maintain profitability and evade regulation. Sooner or later, they will be able to divide up all the fish.

With the stock market boom of the past two years, some people, not satisfied with playing the small rural commercial banks and medium-sized city commercial banks, have set their sights on national banks.

Mr. Chen was naturally disgusted and a little jealous. He had leveraged his investments to a great extent, consistently investing twice his net assets. But there are always people more capable than you, and others were playing even more aggressively. The real estate market was also quite favorable, and over the next ten years, some people actually made a fortune.

"President Chen, you just said you wanted to take 10% of Minsheng Bank's shares, and you also said you supported me in eliminating related-party loans. You believe that relying solely on shareholder support isn't enough. This is a business worth over 10 billion yuan. How much money do you have? You're not thinking of relying on the drive of young people, are you?"

Liu Yonghao spoke these words slowly, emphasizing the phrase "eliminate related-party loans" with great meaning.

"The youthful vigor" refers to being bold and borrowing excessively.

As far as he knows, top private enterprises were investing in the first half of the year, and there may not be a single person in the entire mainland who can come up with so much cash on their own right now.

Seven or eight billion yuan in cash is the absolute maximum. For example, Duan Yongping sold his NetEase shares and got a lot of money. Shi Yuzhu's Brain Gold has a large cash flow. Chen Tianqiao just sold his Sina shares, which should also be worth several billion yuan.

120 billion. If some companies change their plans in the second half of the year and sell off some major assets, there may be a few such cases.

And if you add those with financing channels, there might be a few more.

But it's only a handful.

He concluded that the young man was probably after a loan.

Chen Xuebing, caught off guard by the words, didn't seem embarrassed: "Hehe, I definitely can't come up with 120 billion, but I've already invested in a bank and become a major shareholder with 120 billion in equity. Even if I operate a double-layer revolving loan with compliant collateral, borrowing 85 billion shouldn't be a problem, right? I can still come up with 35 billion in capital this year."

He has seized every opportunity to threaten the board of directors of Minsheng Bank. Minsheng Bank's circulating shares exceed 57%, with retail investors making up the majority of them and having no voting rights. If he were to acquire 10% of the shares, his actual voting rights would be at least 18%, a percentage that would almost completely control the board of directors of Minsheng Bank. If he doesn't show any desire for power, everyone will have to vie for his position, which would effectively make him the second-in-command.

Such opportunities are definitely worth investing in, but there's no need to rush; you can invest in a planned way.

However, judging from Liu Yonghao's dejected tone just now, he needs to take action now. Otherwise, with Liu Yonghao removed from the board of directors and Lu Zhiqiang and his associates all tied together, it will be difficult for him to intervene.

His thoughts raced, and he chuckled leisurely:

"I just heard from Mr. Liu that the board of directors can't continue? A resolution to change the board seats requires more than two-thirds of the votes to be valid, right? How much of your voting power are you short of the 34% veto power? My TMT fund happens to have some spare cash that I can use."

Liu Yonghao glanced sideways slightly: "Spare money? How much?"

"Not much in the short term, around a billion, but after a while, it will be four or five billion."

Chen Xuebing stated the number with a slightly conservative tone.

The TMT fund earned 2 to 3 billion yuan from BOE, that's with dividends. If they didn't distribute dividends and kept 60% of the clients' money in the fund, they would have at least 5 billion yuan.

"Mr. Chen, I've heard about the returns from your fund. You're using it to buy bank stocks? They're at a high point right now," Liu Yonghao said hesitantly.

Minsheng Bank's stock price rose from 4.28 yuan last year to 12 yuan now, but has been hovering around that price since February this year, seemingly having reached its peak.

If the stock market weren't so high right now, he would sell everything he owns to buy more shares until the veto threshold is reached. But buying now is really not worthwhile.

Chen Xuebing nodded and smiled. With that reminder, the other party was indeed a genuine person.

But is 12 yuan too high?

When people are climbing a mountain, they often look down and feel like they have already reached the summit.

Bank stocks are the ballast of the market. He doesn't know how Minsheng Bank will perform, but he knows enough that the overall market will perform.

"Mr. Liu, there's no need to worry. Half of the money in the fund is mine, and my investors have never had any objections to me. Since a righteous person like Mr. Liu has been ostracized by the board of directors and is about to be forced out, I, Chen, am willing to be the white knight and save the people's livelihood."

(End of this chapter)