Chapter 44
Translator: Aafkee
Proofreader: Tata
Monday came, and the Zhong Ming Funding’s research department talked about the incident.
At nine in the morning, the three independent directors of Bo Da Materials abruptly issued a joint statement, casting their doubts on the authenticity of the 14 billion deposited in Summit Bank, as claimed in the company's report. Additionally, they warned investors about the significant investment risks involved.
The directors stated that they had authorised the office to send an inquiry to the bank but have yet to receive a response. Following the release of the statement, one of the company’s directors announced his resignation from the company.
The public statement and the resignation announcement caused quite a stir. Before the market opened in the morning, all major financial and stocks and bonds websites reported the public statement, capturing the attention of many stock commentators.
Only then did the market begin to realise that things appeared to be far more complicated than simply breaching a contract.
Lu Chuiqing kept a close eye on Bo Da's stock price. Bo Da had accumulated far too many debts, just as he had predicted. Because the in and out cash flows were so closely interconnected, any problem in one part would definitely affect the entire flow.
Concerning the two billion worth of financing bonds, Xia Yuanbo had most likely realised the cash flow crisis in advance and was unable to reduce the company's expenditure, which resulted in him broadening the sources of income.
Xia Yuanbo initially believed that he could maintain this illusion of being prosperous, but he did not anticipate the usual downstream* clients failing to pay on time, which became the direct cause of the collapse of Bo Da Materials' entire capital chain.
(T/N*: The upstream process seems to have something to do with searching for and extracting raw materials, while the downstream process is more about distribution, wholesaling, and retailing, which involve delivery to clients. You can read more about that here.)
The independent directors were already questioning the validity of the report forms. Although there was insufficient evidence to prove that the savings in the bank were fake, the sensitive market was very honest. When the stock market opened, the price of Bo Da's stock began to fall.
It stopped dropping at 10:10 am.
In a very good mood, Lu Chuiqing exhaled deeply and sipped some water. He looked around at his colleagues who were discussing the incident. Some people appeared concerned, while others sighed repeatedly. He then realised that some of his colleagues had actually recommended Bo Da's stocks, so he couldn’t show his happiness too obviously.
Lu Chuiqing quickly hid his smile and began typing, appearing serious, but was secretly delighted in the recent development.
Lu Chuiqing couldn't wait for lunchtime. Once the time came, he dashed to the company's cafeteria, took his meal, and gave Xiao Zhan a call.
When the call was connected, Li Chuiqing asked immediately, "Xiao Zhan, I saw the statements from the independent directors of Bo Da. How did you know they would release the statements today?"
Lu Chuiqing paused for a moment before continuing with surprise visible in his voice, "No way? Don't tell me you-"
"It wasn't me," Xiao Zhan answered."I happen to know the CEO of the company where Director Zhou plans to transfer, and he told me about it."
Lu Chuiqing breathed a sigh of relief, once again impressed by how vast the network of people in the investment circle is and how connected these people are in terms of their interests. Lu Chuiqing could not hold back his excitement, "All we have to do is wait for their stock prices to reach a few limit downs."
Noticing Lu Chuiqing’s tone and being a bit cunning, Xiao Zhan responded with a low chuckle.
However, it was a completely different situation in the office of Bo Da's headquarters.
People came and went into the office, the staff appeared hurried, and the phone calls could be heard from everywhere. It was a complete mess. Xia Hao hurriedly exited the elevator, but no one seemed to bother to greet him as they were all preoccupied with their work.
Xia Yuanbo was not present at the office. When Xia Hao saw Xia Yuanbo's assistant walking by with a stack of documents in his arms, he grabbed him quickly and asked anxiously, "Where's my dad?!"
The assistant was too busy to greet him. He replied to him directly, "Director Xia went to Shuo Zheng's business office."
Xia Hao tutted and stood still for a few moments before turning around and returning to his own general manager's office. He closed the door, picked up his phone and dialled Director Liu, one of the board of directors members.
The call finally went through after about a half-minute wait. Director Liu was also busy dealing with the sudden statements coming from the independent directors and their resignation, so he sounded extremely rushed, "Hello, Young Master Xia?"
"Director Liu, what's with that statement?!" Xia Hao inquired. "And why did Director Zhou resign?! My father is not picking up. Why is he going to Shuo Zheng office?!"
"Young Master Xia, the board members were not aware of the statement and resignation. Director Xia did not know either." Director Liu was sweating profusely from anxiety, "Director Xia asked the finance department to organise and issue the company's records of its cash flow, but we couldn't figure out where the 10 billion went without Director Xia! The stocks Director Xia used to borrow money… were much more than we knew in the past year! Many of them have already been frozen!"
The moment he heard those words, Xia Hao's body turned cold. "How much did my father pledge?! Why did he borrow money?! Why didn't he tell us?!" He exclaimed.
"We really don’t know!" Director Liu uttered. "Director Xia didn’t tell us anything! Many upstream clients are already rushing us to provide a new guarantor. The stock exchange called ten minutes ago and asked us to provide proof of the company's cash. They even asked if we did any financial falsifications!"
"Hold them up first! How much does the company owe now?!"
"According to the amount of stock pledged, it's about-," Director Liu swallowed, looking nervous. "It's over three billion, and the total, including the previously deferred bonds, is more than five billion."
Xia Hao appeared to be in a trance for a brief moment. His hand trembled slightly before he forced himself to calm down and shouted, "What's the plan now?! Has the bank responded?! Doesn't the company have about a hundred billion or so? Rush the bank for a reply! The rumours are spreading like crazy now... How are the company's stock prices?! Oh, right! Didn't we get approval for several investments from a few state-owned units? Have someone issue a strategic investment statement saying they're taking over some percentage of our debt!"
Director Liu responded in panic, "But that would confirm that the company does have a problem with the capital chain, Young Master Xia!"
Xia Hao slammed the table suddenly as he thought of something, "Director Liu! How about the stocks Xiao Zhan bought? Doesn't he have any response to the fall in stock prices today?!"
Director Liu was stunned, "Don't you know? CEO Xiao...sold all the stocks before the company broke our side of the contract."
Xia Hao's eyes widened, and his expression changed immediately, "What? Sold? He sold it ten days ago?! Why didn't anyone tell me?!"
Director Liu thought it was strange as well. The first person to know about the news was Director Xia. Even the other board members were notified by Director Xia. "We...We thought Director Xia had told you as soon as possible, and all of us thought you must have known about it..." Director Liu said, perplexed as to why Xia Hao had not been notified.
Xia Hao was absolutely stunned, and his thoughts were in a mess. His chest rose and sank violently for a while before he yelled out of control, "This must be related to Xiao Zhan! He wanted to short-sell our company from the beginning! He bribed our independent directors, didn't he?! Who knows, those three independent directors might have issued that statement by his orders! Also, Director Zhou's resignation...Xiao Zhan must have poached him! That explains everything! Otherwise, there's no way he would sell the stocks away at the highest price just before the incident! Check on him, quick! I'm going to sue him!"
Director Liu quickly reassured him, "Young Master Xia, calm down. The board of directors has already considered this possibility and even arranged for a follow-up, but there is no evidence pointing at CEO Xiao or Value Scanl...We have also contacted Director Zhou. He has already accepted a position as a CEO of a real estate company and not in CEO Xiao's company."
Xia Hao exclaimed, "Impossible! That's impossible! You have no idea how cunning Xiao Zhan is!"
Director Liu hesitated before he continued, "Also, there is something we must tell you, Young Master Xia. The supervisory board has already asked us to conduct a self-investigation, and the financial department warned us that a major shareholder might secretly use the company's funds...You should be mentally prepared, Young Master Xia."
Xia Hao almost passed out, his brain and ears racing. The news shocked him and left him speechless for a moment. He was stunned and dumbfounded, staring at the ground, his mind completely blank.
The large stockholder used the company's funds?
His dad used the public funds?
So... Was it true that the company lied about its financial situation?
How...how...how is that even possible?! That is not possible! The money was still in the bank account the last time he checked it out, and the remaining balance was more than 14 billion in cash! There was no opportunity for his dad to take the money!
The most urgent matter was to withdraw that 10 billion and use that money to help with the company's emergencies. Once the shares his father pledged to others were recovered and the crisis had passed, he would thoroughly investigate and expose what Xiao Zhan had done behind the scenes!
Xia Hao's phone rang again. He looked at the screen blankly and saw that it was a phone call from his mother. He accepted the call robotically, held the phone up to his ears and heard his mother sobbing mixed with anxiety.
Xia Hao did not fully comprehend what his mother said. He assumed she was asking about his dad's whereabouts and what had happened to the company.
Xia Hao hung up the phone quickly and sat dazed in his chair. He never imagined that the company would face this kind of crisis. It shocked him even more that his father would do such a desperate thing.
He was accustomed to getting what he wanted without having to work for it. He was completely overwhelmed at times like this.
Xia Hao called Xia Yuanbo repeatedly but to no avail. He anxiously called Su Weiyu's father, Su Rende. He was certain that if his father went to the office, there was almost certainty that he was there to look for Su Rende. But what made him panic was the fact that he couldn’t reach Su Rende's phone either.
Muddleminded, Xia Hao remained at the office until two in the afternoon, doing absolutely nothing. His mind was filled with how his dad, Xia Yuanbo, had illegally pledged the stocks' shares and about how he might have used the company's fund for personal gain.
In his heart, that ten billion plus deposits in the bank were the company's final straw.
Suddenly, a series of panicked footsteps could be heard near him. The assistant did not bother to knock on the door before opening the door to Xia Hao's office.
The assistant was panting, his hair all messed up from rushing over, "Young Master Xia, the bank has replied!"
Xia Hao stood up from his chair instantly, "What did they say?! What about the money?!"
"It's gone!" The assistant's face was tense; his voice was trembling, "The money is gone! The bank said the company's account balance is zero; there is not a single penny left in the account!"
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