Chapter 46 Article 15 Brilliance: The Exit of the "Savior"

In the summer of 1991, the most sensational news in the Chinese business circle was "canned food for airplanes".Mou Zhong of the Nande Group exchanged 500 wagons worth 400 million yuan for daily necessities in exchange for 4 Su Zhitu-154 aircraft, and he claimed to have earned 80 million to 100 million yuan from it.This rather whimsical transaction became widely known after the media hyped and reported it.All the people talked about it with great interest, and marveled at it as a genius model of capital management.In the office in Building 7 of Shanghai Donghu Hotel, when people were discussing this matter enthusiastically, 35-year-old Yang Rong sat on a high-backed leather chair with a look of disdain.At that time, the operation of a capital project he had painstakingly planned was nearing completion, and in hindsight, it was indeed much more sophisticated and sophisticated than the "cans for airplanes" of bartering.

For many years, Yang Rong packaged his background and experience as a mystery.He claims to be from Huizhou, Anhui Province, graduated from Southwestern University of Finance and Economics with a doctorate in economics.In an internal meeting of the company, when he introduced his experience, he also said: "I fought in Vietnam. In 1988, I suffered a serious injury. My leg was broken and my head was opened. I entered the operating room for the third time. Miraculously, there was no accident. He survived with disabilities, and from then on he began to cherish and despise life." In fact, he was born in Beiguo Town, Jiangyin City, Jiangsu Province. His original name was Yang Yong, and he had four brothers.It was around 1995 that he got his Ph.D. in economics. Before that, he should have never studied in any university.After graduating from junior high school, he first worked as a chef for a while, then contracted a small shop in his hometown, and then went to work in a foreign trade company in Jiangyin City.

He has a second brother named Yang Ao who runs a fine chemical factory in Wuxi. In September 1989, Yang Rong's foreign trade company issued 4 million yuan in corporate bonds, and he took the cash and went to Shanghai to speculate in stocks.This person was very courageous and restless by nature since he was a child. He was naturally like a fish in water in the troubled early stock market and became the first generation of capital speculators.The East Lake Hotel in Shanghai was the gathering place for speculators in the early days. The well-known people in Shanghai, such as Yang Wanwan, Liu Tai, Zhu Huanliang, etc., once camped here. It is to earn a little money, and at the same time to experience a lot of operational skills.One day, he simply changed his name to Yang Rong, which has the meaning of "relying on finance". Around 1990, by chance, he met a big man.

This big shot is Xu Wentong, Secretary of the Party Committee of the China Finance Institute.Mr. Xu is a native of Qidong, Jiangsu, and a fellow villager in Yangrong's neighboring county.He is a veteran financial educator. Many prominent officials and scholars in China's financial system have been taught by him. He has deep connections in this circle and is unique for a while.Although Yang Rong did not come from a major, Mr. Xu appreciated his unique capital sense and capable operation ability.Through Xu Wentong, Yang Rong got acquainted with some high-level political and business people.In this kind of communication, Yang Rong's vision opened up sharply, and he lost a lot of arrogance, so he has a better future than Yang Wanwan and others who live in gray corners and only know how to buy and sell.With the full support of Xu Wentong, Yang Rong went to Hong Kong to establish Huabo Finance Company. Its initial investor was Hainan Huayin International Trust and Investment Company, of which Xu Wentong was the chairman.

In the early 1990s, many state-owned enterprises with rigid mechanisms were in decline and were unsustainable. Newspapers began to discuss the "life and death" of state-owned enterprises at length.In the view of Xu Wentong and others, it is obviously a dead end to revitalize state-owned enterprises only by loosening management and financial blood transfusion. Therefore, bold innovations must be made in the institutional structure and operating model, and the capital market is undoubtedly the most important. A resource and means to rely on.The young and vigorous Yang Rong agrees with this idea very much.So, under the guidance of insiders, he came into contact with a troubled state-owned bus factory in Northeast China, which is Shenyang Jinbei Bus Factory.

Shenyang Jinbei Bus Factory is a newly established factory. In 1987, the Shenyang Agricultural Machinery and Automobile Industry Bureau put together more than 50 small auto repair and parts factories in the bureau, and Zhao Xiyou, the deputy director of the bureau, was appointed as the factory director.Although Zhao Xiyou is nearly 60 years old, he is a very active and aggressive reformer.At the beginning of the establishment of Jinbei, the personnel were scattered, the equipment was old, the funds were insufficient, and it was almost useless.Zhao Xiyou thought of a way to issue shares.According to reports at the time, Jinbei was the first joint-stock company in the three northeastern provinces to be allowed to issue shares publicly.Zhao Xiyou's fundraising scale is 100 million shares, 1 yuan per share.In order to raise funds, Zhao Xiyou tried his best. He even went to the compound of the State Economic Reform Commission in Beijing to post notices to sell stocks. Curious media reporters reported the news.However, he only sold 27,000 shares after setting up a stall for one day.In this way, the issuance of shares began at the end of 1988, and it took more than a year, and the remaining half of the shares were in my own hands.At this moment, Yang Rong went north and appeared in front of the battered Zhao Xiyou as a savior.The first thing he said was: "Please sell me the remaining stocks." What made Zhao Xiyou even more incredible was that the young man from the south said to him: "I want Jinbei to become the first A Chinese company listed in the US."

On July 22, 1991, Yang Rong bought 46 million book-entry shares at the original stock price.These stocks were packed in 20 cardboard boxes and airlifted from Shenyang to Shanghai. In the basement of Building No. 7 of Donghu Hotel, Yang Rong hired a class of students from Shanghai University of Finance and Economics and spent more than half a month. Fill in the name and transfer the account one by one.As a result, he became the major shareholder of Jinbei. A mystery that has never been solved in the future is where the funds Yang Rong used to buy Jinbei stocks came from. In 2003, Yang Rong said in an interview with Phoenix Satellite TV that part of the capital he invested in Jinbei was borrowed from his brother, and the other part was obtained from stock trading in Shanghai.According to many stock market experts, the scale of China's capital market around 1990 was very small. The two stock exchanges in Shenzhen and Shanghai were officially established in December 1990, and there were less than 20 stocks in circulation. Even if Yang Rong is a talented person, it is absolutely impossible for him to accumulate tens of millions of yuan in a year or so.According to Su Qiang, who has followed Yang Rong since he graduated from university, when he went to Donghu Hotel to join Yang Rong in March 1991, "under Yang Rong, there were mainly three or five people who had no job and carried a bag all day long. There are a lot of ID cards and stamps flying around in it, which has nothing to do with business management. What is legal and what is illegal is unclear.”According to the 21st Century Business Herald in 2003, there are files showing that Yang Rong planned to acquire Shenyang Jinbei, and all the cash he invested came from Hainan Huayin International Trust and Investment Company controlled by Xu Wentong.

After the stock purchase was completed, Yang Rong went to the United States immediately.In New York, Merrill Lynch analyst Wang Kangmao was eagerly waiting for him.According to Wang Kangmao's recollection, Yang Rong was wearing a heavy military overcoat and walking on the narrow and high-rise Wall Street. He said loudly: "We want to plant the five-star red flag on this ground." The company promised to be the underwriter for Shenyang Jinbei's listing.Wang Kangmao still remembers his surprise when he went to the Shenyang factory for the first time.Although he was fully prepared for the backwardness of China's state-owned enterprises, the scene he saw was still very discouraging: "Jinbei Automobile is a very old factory with about 50 parts factories, which is very extensive. It’s very poor, it’s a handcrafted workshop type, and you can’t sell it at all. The toilets in the factory are leaky, and female accountants from international accounting firms are reluctant to go in.” The status quo of the enterprise at that time was that Jinbei had almost no high-quality assets. Hiace buses can only sell 2,000 vehicles a year, and 99% of the parts are imported from Japan. At a time when the yen is soaring, the factory's return funds are not enough to buy parts.In the international capital market, the New York Stock Exchange has always been known for its strict regulations. At that time, no companies in Hong Kong and Taiwan were listed here.However, under the operation of Wang Kangmao and Yang Rong, Shenyang Jinbei's listing documents passed the review of the US securities regulators and was finally approved for listing.Objectively speaking, when it comes to the first Chinese state-owned enterprise listed in the United States, it is impossible to get the little-known and lifeless Shenyang Jinbei.Its unexpected victory is mainly due to the fact that the US capital market has begun to favor the "China concept", and they have no knowledge of this socialist country.In this way, the "golden cup" delivered to the door became the selected object.

During the listing process of more than a year, Yang Rong, who is not very good at English, actually only went to New York twice. Most of the affairs in the United States were handled by Wang Kangmao and others, and his main energy was focused on domestic capital. on the combination.There are various indications that when entering Jinbei, Yang Rong, who was born as a private speculator with shallow qualifications, was not so much a buyer as a trader active in front of the screen, with a powerful political and business relationship hidden behind him. Groups and intricate capital networks.However, this well-thought-out person is obviously not willing to play this kind of "shadow puppet"-style role in the quack, he wants to have his own "kingdom".In the same month when Jinbei stock was purchased, Huabo Financial Company, Hainan Huayin International Trust and Investment Company and Shenyang Jinbei Automobile Manufacturing Co., Ltd. established a new Shenyang Jinbei Bus Manufacturing Co., Ltd. with a registered capital of 29.98 million US dollars. The strange figure is because the policy at the time stipulated that joint venture projects worth more than US$30 million had to be reported to the State Council for approval.Jinbei holds 60% of the shares, while Huabo and Huayin hold 25% and 15% of the shares respectively.

In 1992, Huayin transferred all the shares to Huabo. In June, under the guidance of experts, Yang Rong quietly set up a project company in Bermuda, a small Pacific island known as the "duty-free paradise" - Brilliance China Automobile Holdings Co., Ltd., which is 100% controlled by Huabo. 40% of the shares of Shenyang Jinbei Bus Manufacturing Co., Ltd. were all injected into this "shell company" specially used for listing.By August, Yang Rong arranged another key share swap on the grounds that “the shares are only 40% and do not meet the requirements for independent listing in the United States”, expanding Brilliance’s shareholding ratio in Jinbei Bus to 51%, becoming the company’s the controlling party.At the same time, Yang Rong quietly completed the capital transformation of Huabo. Its shareholding structure was changed to Yang Rong accounting for 70%, another natural person accounting for 30%, and the legal representative is still Yang Rong.In this process, the relationship between Xu Wentong and Brilliance is very intriguing.After several reshuffles, the state-owned Hainan Huayin, the provider of acquisition capital, gradually faded out; in 1993, Xu Wentong left Hainan Huayin, and then appeared in Hong Kong Huabo Finance Company, the core holding company of the "Brilliance Group". and serve as the chairman.

Obviously, Yang Rong has fully amplified his rights and interests in this listing project through a series of dizzying capital reorganizations.His outstanding imagination and operational ability in capital operation have been clearly demonstrated at this time.In this process, there was a small detail, which he claimed to be an exquisite pen at the time, but it became his "Achilles' heel" in the future. At that time, Shenyang Jinbei was going to be listed in the United States, and the concept of a state-owned enterprise was not enough to arouse the interest of American investors.Therefore, under the guidance of people behind the scenes, in April 1992, Huabo of Yang Rong, Hainan Huayin under the leadership of Xu Wentong, the China Finance Institute and the Education Department of the People's Bank of China jointly initiated the establishment of the China Financial Education Development Foundation. It is an "unofficial non-profit organization". The registered capital is 100,000 yuan from the Education Department of the People's Bank of China from "Career Income". Brilliance contributed 1 million yuan, and Yang Rong served as director and vice chairman.Afterwards, Brilliance became invisible, and its assets were all put into the foundation in the form of "transferring".In a sense, this foundation played a decisive role in the listing of Jinbei.Wang Kangmao, who participated in the whole listing process, confirmed that when the SEC officials visited China, the People's Bank of China received them, and some documents were signed in a meeting room of the People's Bank of China.Wang Kangmao said: "Without them, Brilliance's listing would not be easy." It is a very wonderful idea to use a foundation with a central bank background and an unofficial non-profit organization as the main shareholder of a listed company.It can stimulate the unlimited imagination of investors without affecting the actual operation. This can be said to be the most subtle and crucial move in the listing case of Brilliance.However, as luck would have it, 10 years later, it was this ingenious design that finally led to the elimination of a generation of hero Yang Rong. In July 1992, A shares of Jinbei Automobile were listed on the Shanghai Stock Exchange. In October, Brilliance Corporation, with Jinbei Bus as its main asset, was successfully listed on the New York Stock Exchange. As the "first stock in a socialist country", it caused a great sensation on Wall Street. It was oversubscribed 85 times and raised US$72 million. "The Wall Street Journal" said in the report: "This is a symbolic event. Perhaps starting today, socialist China has truly integrated into the game of capitalism." It is a rare event to repackage an unremarkable and inconspicuous company and be able to successfully raise funds in both the domestic and the most important capital markets in the world.At that time in China, the China Securities Regulatory Commission had not yet been established, and even the "Company Law" was still under discussion. people admire.In the future, he very proudly told the reporter of "Chinese Entrepreneur": "Foreigners think that I am the first person to promote the internationalization of Chinese enterprises. They say that I am the one who promotes the taxation of Chinese internationalization. I promoted it, and I promoted the international accounting standards for listing. Later, when many Chinese companies went public in the United States, they all replaced my prospectus with their business content and went public.” His words were not without exaggeration, But it's also mostly true.The world-renowned Harvard Business School once included the Brilliance IPO Prospectus as a classic case textbook. Of course, Jinbei Bus has benefited the most from its successful listing in the United States.This automobile factory patched together from the agricultural machinery department has become a well-known enterprise with the most optimized property rights in China.The Dadong District of Shenyang, where the factory is located, is an area where there are many old state-owned enterprises. The factory and other factories were built next to each other, and they all fell into trouble around 1991. Only the Jinbei Automobile Factory at the end of the road was reborn from the phoenix and took on a new look.Due to the listing of Jinbei Bus, Liaoning Province and Shenyang City have made great ambitions and vowed to build a brand-new automobile industry base in Northeast China. In the words of local officials, "we will build Shenyang into China's Detroit."