Chapter 8 Deron's 6 turnovers

Review background: "You will have a magnificent career that no one can match. But at the age of 40, everything will be destroyed and your reputation will be ruined." When the famous Tang Wanxin uttered this prophecy, this "ominous prophecy" began to torment him. At the age of 38, he announced that he would officially "wash his hands in the golden basin" at the age of 40, but he still could not escape the curse in the dark, and fell down in his forties.This fateful story, created by Tang Wanxin and him, has added a bit of mystery after the collapse of the Delong Group, which was once the largest private enterprise in China.

But the stories of Tang Wanxin and Delong have been deconstructed one by one in various forms after Delong collapsed. In December 1986, Tang Wanxin raised 400 yuan to open a "friend" color printing shop at the side gate of People's Park on Tuanjie Road, Urumqi.After making money in the color printing shop, Tang Wanxin started a lot of unsuccessful businesses. In 1992, the Shenzhen Stock Exchange announced the issuance of 500 million domestic public shares and 5 million lottery forms, with a winning rate of 10%. Each lottery form can subscribe for 1,000 shares.Tang Wanxin spent money to invite 5000A from Xinjiang to Shenzhen to queue up to receive the subscription lottery form, and the received lottery form was exchanged for original shares, which made Tang Wanxin a lot of money.Since then, Tang Wanxin has become obsessed with the stock market with the "fastest money coming in".

Since 1996, the "Troika" under Delong has run wildly in the Chinese stock market, setting a record of soaring soaring that stunned the shareholders of Qianshi.The three stocks controlled by a banker all soared by more than 10 times within 5 years, and Delong has the title of "the world's number one banker".For quite a long time, there has been an abnormal phenomenon in China's stock market that "if the stocks are not good, they will be famous if they have 'morality'; if they are not afraid of high prices, they will be successful if they have 'long'".

In 1998, Delong invested US$100,000 to purchase the decommissioned aircraft carrier Minsk of the Soviet Pacific Fleet.The world's first theme park with an aircraft carrier as the main body was built in Shenzhen.Since then, Delong has regarded itself as "the aircraft carrier of Chinese private enterprises", and in the capital market, it has also been described as an "unsinkable aircraft carrier". In 2002, Delong's expansion speed was dizzying. In May, Delong established Denong Supermarket Co., Ltd., announcing an investment of 10 billion yuan within five years to complete the layout of 10,000 agricultural supermarkets in 10 major agricultural provinces. In July, Xiang Torch issued consecutive announcements, announcing that it would build a heavy-duty vehicle empire.Some experts predict that in order to realize the goal proposed by Delong, it needs to invest A6 billion to 100f B yuan. In September, Delong established Animal Husbandry Investment Co., Ltd., planning to invest 2.5 billion yuan to build a leading enterprise in China's dairy industry. In November, Delong Tourism Group was established to become a tourism "aircraft carrier" with the most scenic resources in China. The total investment of this project is 3.5 billion yuan. In November, Tang Wanxin's elder brother Tang Wanli was elected as the vice chairman of the All-China Federation of Industry and Commerce. He announced to the media: "Delong will enter the world's top 500 within three years." Long Building.In the eyes of outsiders, Delong is at the peak of its glory at this time. It claims to control assets of 120 billion yuan, has more than 500 enterprises and 300,000 employees, and has been involved in more than 20 fields. It has become China's largest A private enterprise group, but in fact, Delong was already terminally ill at this time.Also in 2002, in less than a year, in order to support and stimulate the already weakened "Delong" stocks, Delong reached holding or shareholding agreements with commercial banks in at least 6 cities. In the summer of 2003, Deron's financial difficulties had not been fundamentally improved. After October, the financial institutions under Delong had almost no new funds. Tang Wanxin traveled around day and night, borrowing as much as 5 billion to 6 billion yuan from others.

By April 2004, Deron's disaster finally came.First, the alloy shares took the lead in lowering the limit, and then the "old three stocks" fell across the board. Within a few weeks, the stock market wiped out all the miracles and paper wealth created by Delong in the past five years. It fell to 5.006 billion yuan on May 25, 2004, and nearly 16 billion yuan evaporated overnight. On May 29, Tang Wanxin left Myanmar. The State Council and the Ministry of Public Security set up special working groups for the Delong case. On July 18, Tang Wanxin returned to China to deal with the aftermath and was placed under residential surveillance.The State Council decided that Huarong Asset Management Company will take full custody of all debts and claims of Delong.

In April 2006, Tang Wanxin was sentenced to 8 years in prison and fined 400,000 yuan for the two crimes of "illegally absorbing public deposits" and "manipulating securities trading prices". During the more than one year since the Deron crisis broke out, the Tang brothers have repeatedly defended and reflected on their mistakes on different occasions.Among them, there are 6 most mistakes involved, and the following text is edited according to his self-report. "Excessive expansion" - in the past, we ate from the bowl and looked at the pot.The accelerated expansion in recent years has led to tight cash flow and hematopoietic functions of the enterprise itself.Due to the rapid expansion of the enterprise, especially after 2001, the pressure of financing led to a single assessment reward and punishment index, poor internal management, serious violations in the development of financial business, occupation of production-oriented enterprise funds in the self-rescue of financial institutions, and media hype And the impact of monetary tightening led to the debt crisis of Delongxiang Pod financial institutions, and quickly spread to production-oriented enterprises, thus affecting the healthy development of the financial securities market and social stability.

"Not resisting too many temptations" - We are always eager to do those higher-end businesses, but if we don't grasp it well, it will bring disaster.The overall economic environment looks good, and Delong's brand and strength have attracted many partners. However, we are faced with too many temptations, and it is inevitable that we will expand too fast.In the face of many opportunities, Delong was a bit greedy for more, so that he underestimated the changes in the macro environment.For example, the recent tightening of loans by banks has put pressure on Delong's capital allocation.Because Delong's prediction is that Delong's own situation has not deteriorated and is still developing benignly. If it follows the past practice, it should be able to get financial support from the bank. But now that money has tightened, Delong's strategic deployment has been disrupted.

"Strategic idealization" - Delong has done a lot of exploration work on the strategic model of industrial integration, and the results have proved to be fruitful.For example, after becoming the owner of Hunan Torch, through a series of industry mergers and acquisitions, its main business income has expanded from 124 million yuan to 10.313 billion yuan in six years.However, due to Delong's lack of grasp of macro policies, some steps were too fast and too idealistic, which led to difficulties when some external factors changed.In the past, our understanding of problems was often based on intuition. We should not pursue it too much if we can walk on a glorious road. We should go to the extent of the business itself. If we pursue it deliberately, the result will not be good.We may have wisdom, but we still lack the means.

"Unable to grasp the rhythm of investment" - Delong did not do a good job in the long-term, medium-term and short-term investment portfolio and the grasp of the investment rhythm.In the past, Delong focused on complementary investments in terms of horizontal and content, such as the complementarity between finance, industry, and industrial chain, but ignored the structural arrangement in terms of investment rhythm, that is, the proportional structure of long-term, medium-term and short-term investment. As far as reasonable, the proportion of long-term investment is too large, which affects the liquidity of assets, sees more attractive investment opportunities and industrial integration opportunities, and ignores the potential risks brought about by the company's rapid growth.

"Mistakes in macro judgment" - precisely some aspects that we didn't pay much attention to before have become stumbling blocks.For example, our development has been very fast and smooth, and the government, banks, etc. are also very supportive, and the credit line granted by the bank is also very large, which also gives us an illusion that as long as there are good industries and good projects, We are not short of funds.But what I didn't expect was that the credit contraction would greatly affect the cement and other industries; coupled with some inexplicable rumors in the market, it also caused difficulties in the financing of our other household businesses, and the operation was affected.

"Use poison to cure poison" - in the financial industry, we made a serious mistake. First, we followed the trend, thinking that as long as everyone in the industry is doing what we do, we will not have too much trouble if we do it. As a result, this has become the Delong incident Dead knot in.Secondly, when a social crisis arises, extraordinary measures are used to resolve the crisis, including guaranteeing the minimum investment income of customers in the marketing of financial companies, using multiple companies to actually hold financial companies, operating beyond the scope of operations, and illegal lending between financial companies. Using "shell companies" as the main body of investment and transfers and concealing related party transactions... This is equivalent to "using poison to defuse poison".