stonecrandall Chapter 226 Idle Chat at Tingsongxuan
Chapter 226 Idle Chat at Tingsongxuan
Upon hearing the words "no business discussions,"
Kuroda, Tanimoto, Otsuka, and the others sitting on the sofas on either side all slowed their breathing at the same moment.
Their pupils contracted almost imperceptibly. Their bodies, which had been leaning back in their chairs, tilted forward slightly in perfect unison. Their waist muscles tensed, shifting their weight to the edge of the sofa.
Within "The Club," a small group, all the life-saving information the Saionji family has used to evade official oversight and determine the life or death of countless companies over the past few years has been released through this seemingly casual "chat."
They already know this set of secret codes, which belong to this circle, by heart.
President Kuroda immediately smiled knowingly.
"Mr. Shuichi is right." Kuroda picked up his whiskey, playing along with the performance. "Tonight, we're just drinking and catching up. Nobody's allowed to mention those messy business matters outside."
"Yes, it's rare to find such a quiet place, so naturally we should relax a bit," Managing Director Tanimoto chimed in.
These seasoned veterans of the business world pricked up their ears. They focused all their attention on Xiu Yi, afraid of missing even a single syllable he would utter next.
Xiu put down the bone china teacup.
He leaned back in his leather chair, as if sharing a trivial anecdote he had overheard on the street the day before.
I went to Xiaguan a few days ago.
Shuichi's gaze fell on the flower arrangement on the coffee table.
"The bureaucrats haven't been having an easy time lately. Several old friends from the Ministry of Finance and the Ministry of International Trade and Industry are getting together, worrying about the wave of bankruptcies among small and medium-sized enterprises triggered by the recent market correction."
Managing Director Tanimoto adjusted his glasses. Large city banks are most sensitive to data on corporate bankruptcies.
Shuichi's gaze swept over everyone present, finally settling on Managing Director Tanimoto's face.
"It seems that the Ministry of Finance is looking to dredge up old financial practices again. They intend to restart that 'escort fleet' model."
Shuichi lowered his voice slightly.
"The bureaucrats feel that since large city banks and high-quality local banks still have plenty of cash on hand, they should shoulder their social responsibility. The Ministry of Finance is preparing to issue administrative guidance requiring high-quality banks with surplus funds to forcibly take over those credit unions and small local banks that are already riddled with bad debts."
(This is the famous "escort fleet method." The Ministry of Finance's idea was to tie the entire Japanese banking industry to a fleet, and have fast, large ships forcibly tow those small, leaky, and sinking vessels to ensure that "not a single one of the ships is left behind.")
Managing Director Tanimoto's expression changed instantly.
Fuji Bank forcibly took over the near-bankrupt Credit Union. This meant that Fuji Bank had to use its hard-earned healthy cash flow to fill the bottomless pit created by reckless lending.
Shuichi gave them no time to catch their breath. His gaze shifted and landed on Kuroda, the president of Daitoa Corporation, and the president of Otsuka Heavy Industries.
"Not just Tibet Province."
Xiu Yi sighed, his tone carrying a hint of helplessness towards bureaucratic practices.
"The Ministry of International Trade and Industry is also considering issuing extremely stringent administrative guidelines."
"They believe that as large trading companies and heavy industrial enterprises at the top of the industrial chain, they should maintain the stability of the entire industry. The Ministry of International Trade and Industry is prepared to ask you to bail out and save those downstream supply chain companies that are deeply mired in debt crises. They are asking you to provide full debt guarantees, or even direct financial injections to rescue them."
President Kuroda's breathing became heavy. President Otsuka also unconsciously tightened his grip on the solid gold lighter in his hand.
To bail out those leveraged maniacs downstream.
Isn't this behavior tantamount to forcibly tying a burning fuse around one's waist?
"The bureaucratic mindset has been ingrained for decades and is difficult to change."
Shuichi looked at the extremely ugly expressions on everyone's faces.
"They always use administrative means to solve economic problems. They're eyeing the cash that you all managed to save before the storm. They want to use your blood to fill a hole that can never be filled."
The air inside Tingsongxuan had dropped to freezing point.
Occasionally, a tiny spark would burst from the silver charcoal in the fireplace, a subtle sound that was all the more distinct in the deathly silent room.
Cold sweat beaded on the foreheads of the several high-ranking officials. They had just been congratulating themselves on having plenty of cash on hand, but in the blink of an eye, this life-saving money had become easy prey in the eyes of the Xiaguan bureaucrats.
"If the Ministry of Finance really issues administrative guidance... how about we join forces and go to Nagata-cho? Daitoa Corporation still has some connections within the party. We can sponsor a little political funding and get the members of parliament to intervene and put pressure on the Ministry of Finance's actions."
"It won't work." President Otsuka slammed his solid gold lighter down on the coffee table with a dull thud. "The aftermath of the Recruit incident hasn't completely subsided. Those politicians in the Diet are terrified at the mere mention of 'political donations.' With the election looming, they'd love to push us out to quell public discontent. Who would dare speak up for the zaibatsu and obstruct the bailout at this critical juncture?"
President Kuroda was speechless, gritting his teeth as he leaned back in his leather chair.
Managing Director Tanimoto reached out and tugged at his tight tie, his eyes darting rapidly behind his glasses.
"Then we'll have to go through the financial channels. Fuji Bank can cooperate with you all to quickly transfer the large amount of cash flow on the books to anonymous shell companies in the local area through complex cross-bridging loans before the end-of-month audit. As long as the head office's balance sheet shows a shortage of working capital, the Ministry of Finance can't just come and steal air, can it?"
"This kind of bookkeeping trick can't fool the Ministry of Finance's inspection bureau." President Kuroda shook his head, rejecting the banker's desperate suggestion. "As long as the funds are still circulating within the domestic banking system, and as long as the unit of account is still yen, those prosecutors can easily penetrate several layers of shell accounts by simply using their lower-level authority. Once it's confirmed that it's a deliberate transfer of assets to evade administrative penalties, the charges will be much more serious, and they might even face the risk of having their licenses revoked."
The lounge fell silent once again.
Political avenues were blocked, and financial fraud could not escape the audit radar of the Ministry of Finance. The cash remaining in the country had become a huge, bloody, and impossible-to-hide piece of meat.
Everyone frantically considered countless possible escape routes in their minds, only to find that every single one of them was a dead end.
Managing Director Tanimoto swallowed hard, his Adam's apple bobbing with difficulty. He turned his head to look at Shuichi Saionji, who sat calmly in the main seat, blowing on the foam of his black tea.
"Then... Mr. Shuichi." Managing Director Tanimoto looked at Shuichi with expectant eyes. Since Shuichi had brought it up, it meant he must have a solution. "How should we deal with this kind of mandatory administrative allocation?"
Xiu Yi smiled slightly.
"The Saionji family has always been cowardly. We absolutely refuse to be these so-called heroes who save the market."
He leaned back in his chair.
"To avoid being targeted by bureaucrats and forced to take on these inexplicable bailout tasks, a strict order has been issued within the group."
"Before the official document from Kasumigaseki is issued, Saionji Corporation will completely cut off all payment grace periods to external companies. We will immediately collect cash payments from all partners and downstream suppliers at risk of overdue payments. Not a single penny of payment will be owed."
President Kuroda frowned.
"But Mr. Shuichi, even if all the cash is recovered and put on the books, the auditors from the Ministry of Finance can still see that huge sum of money when they check the bank statements. They will still issue administrative guidance."
Xiu glanced at Kuroda and nodded firmly.
"Kuroda is right. The cash left on the books in the country is too conspicuous."
He lowered his voice.
Therefore, every penny of Japanese yen we receive will not remain on our domestic accounts.
"They will be immediately remitted out of the country. Within 48 hours, they will all be converted into U.S. Treasury bills and other safe-haven assets overseas."
"As long as all the funds are transferred out of the country, the domestic balance sheet will truly show a state of 'dry liquidity'."
"Even if the bureaucrats in Xiaguan wanted to issue administrative instructions and ask us to take over the mess."
He spread his hands, making an extremely helpless gesture.
"They can't force us to go to Wall Street and sell our U.S. Treasury bonds to bail out the Japanese market, can they? That involves complicated cross-border foreign exchange controls, and they don't have the guts to cross the American bottom line."
The people in the lounge suddenly realized what was going on and nodded in agreement.
Xiuyi's approach aligns with the instinct of capital to seek profit and avoid harm.
Allowing cash to remain in domestic bank accounts is like leaving a piece of meat on a chopping board; sooner or later, the Ministry of Finance and the Ministry of International Trade and Industry will forcibly take it away in the name of "maintaining the overall situation."
Only by resolutely recovering all the money that has been scattered abroad and immediately and completely transferring it overseas to become foreign government bonds protected by international law can this private property be truly preserved.
Managing Director Tanimoto took off his gold-rimmed glasses, took out a handkerchief from his pocket, and subtly wiped away the cold sweat on his forehead.
When he put his glasses back on, his once gentle eyes had turned cold.
"Mr. Shuichi's 'casual conversation' was truly enlightening."
"Looks like I'll have to go to the credit department myself first thing tomorrow morning. I need the risk control department to conduct some 'routine stress tests' on all of the bank's corporate clients."
"It's in accordance with regulations to recover accounts with overdue risks in advance. As for those idle positions, the foreign exchange department happens to have some low-risk overseas government bond quotas, so we can allocate them as a precaution."
President Kuroda, sitting opposite him, echoed his sentiments.
"Managing Director Tanimoto is right." President Kuroda swirled the ice ball in his glass, making a soft sound. "Tomorrow morning, as soon as we get to work, Daitoa Corporation should also 'regulate' the payment terms of its subsidiaries. We should also clean up some of the less healthy downstream partners. The European branch was complaining about a lack of working capital the other day; we can transfer these recovered surplus funds there for some routine financial management."
The president of Otsuka Heavy Industries grabbed a lighter from the coffee table and stuffed it into his suit pocket.
"The accounts receivable cycle in heavy industry is indeed a headache with its long duration," President Otsuka sighed, as if complaining about a trivial matter. "I need to have the finance department reconcile the accounts tomorrow. For those customers who are overdue on payments, let's suspend supplies for now, consider it a short break for the workers in the downstream factories."
Everyone breathed a sigh of relief and smiled.
This tea party, as always, was a relaxing "casual chat".
Xiu Yi sat upright in the main seat.
He looked at these "old friends" who were completely absorbed in their game, his slight smile undiminished.
He slowly raised the bone china teacup in his hand.
"The tea tonight was indeed quite good."