Chapter 78 Dragons and Fleas

In 2003, Zhao Xinxian and his Sanjiu rushed to the edge of the cliff after running wildly without gaining anything. In May, the "999 Sanjiu Pharmaceutical" billboard on Manhattan's Times Square was quietly demolished, and Zhao Xinxian's eight-year dream was gone with the wind.For this billboard, Sanjiu needs to pay about 120,000 US dollars per month. After 8 years, the total amount has exceeded 10 million US dollars. The current state of Sanjiu's funds can no longer support this expensive landscape. On September 28, the "21st Century Business Herald" published an article "9.8 Billion Loans: Bank Forced Sanjiu Group", disclosing that Sanjiu owed a total of 9.8 billion yuan in bank loans and had fallen into a huge financial crisis.As soon as this article came out, Sanjiu's financial dilemma was immediately exposed to the world. In the next month or so, "debt collectors" came in droves, and Sanjiu's headquarters was in chaos.Some impatient banks began to seal Sanjiu's assets, freeze the pledged equity, and filed a lawsuit in the court.Sanjiu's hundreds of descendant companies all over the country have become targets of bank duress.Among them, the Industrial and Commercial Bank of China in Huzhou, Zhejiang Province, simply froze the bank account of Sanjiu Huzhou Pharmaceutical Factory and seized all the incoming working capital, which caused the pharmaceutical factory's capital chain to break, production and operation came to a standstill, and it had to declare bankruptcy .

For all businesses, the bankruptcy of bank credit is almost hopeless.Sanjiu has reached the most thrilling moment since its inception.At such a time, Zhao Xinxian, who was trying to save himself, suddenly targeted the owner of state-owned assets.He believes: "The root of Sanjiu's high debt ratio is that Sanjiu Group is a freak. As a state-owned enterprise, its state-owned investors exist, but they have no actual capital contribution. The state-owned investors have not fulfilled their investment obligations. For Sanjiu As far as the group is concerned, not only did the state not pay a penny, but it also never enjoyed preferential policies such as debt-to-equity swaps and discounted loans."

Obviously, Zhao Xin, who has passed the retirement age of 60, does not want to wait any longer.He wanted to take advantage of the financial crisis to completely—at least partially—solve Sanjiu's property rights. On the issue of Sanjiu's property rights, Zhao Xinxian was very wavering. He always felt that Sanjiu was created by himself.He even said to his subordinates in the audience at a meeting of middle and high-level cadres: "Without me, Zhao Xinxian, there would be no Sanjiu." He has hardly been subject to too much restraint and interference; the treatment he has received is also extremely high. In addition to political honors such as national model worker and member of the National Committee of the Chinese People's Political Consultative Conference, he also has a second-level military rank and enjoys the treatment of lieutenant general. It is unique among Chinese entrepreneurs.However, even though he created Sanjiu, Sanjiu was still not his.

Zhao Xinxian has not thought about this issue for a long time. In 1998, the reform of state-owned enterprises entered a critical stage, and the property rights clarification experiment was once acquiesced. Many enterprises began to try MBO at the management level. Southern enterprises such as TCL and Midea completed the property right transformation first.In this regard, Zhao Xinxian acted very indifferent, and said to the reporters who came to interview him: "I made the Sanjiu big, and MBO didn't need to do anything." Later, he began to realize the importance of property rights, but he only said lightly: "It's useless for me to think about this issue. It's up to my 'mother-in-law' to think about it." At the end of 1998, the central government issued an order to decouple the arms and businessmen, and Sanjiu was decoupled from the General Logistics Department of the PLA, and was put under the management of the central large-scale enterprise working committee; By 2003, the State Council established the State-owned Assets Supervision and Administration Commission, and Sanjiu, as one of the 187 enterprises directly under China, was transferred to its management.With the change of "mother-in-law", Zhao Xinxian's initiative in property rights reform gradually became smaller and smaller.

When the financial crisis broke out in the autumn of 2003, Zhao Xinxian suddenly felt that this was an opportunity he could take advantage of. He did some calculations: "Sanjiu has developed to this day, and the profits and taxes turned over to the country are more than 4 billion yuan, the interest turned over to the bank is more than 3 billion yuan, and the interest paid to the superior is nearly 1 billion yuan. This figure is the same as that of Sanjiu. The loan figures of the banks are similar, all around 8 billion yuan." Therefore, he put forward two requirements: "One is to realize the problem of capital contribution in place and solve the final attribution of 5 billion yuan of net assets; the other is to complete the shareholding system reform and establish A standardized corporate governance structure will finally complete the improvement of the incentive mechanism and supervision mechanism." In a media interview, when a reporter asked "How can Sanjiu get out of the predicament and continue to complete the mission of integrating China's traditional Chinese medicine industry", he answered straightforwardly Dao: "If I don't solve my property right problem, Sanjiu will have no way to integrate this industry. Only when Sanjiu solves the property right problem can it have the power and motivation to integrate."

In March 2004, at the National "Two Sessions" held in Beijing, Zhao Xinxian, a member of the National Committee of the Chinese People's Political Consultative Conference, once again pointed the finger at SASAC in an interview with Chinese and foreign reporters.He said that among the central enterprises under the jurisdiction of the State-owned Assets Supervision and Administration Commission, there are some such enterprises, that is, the state did not invest capital, and the enterprises developed by borrowing from the original superior unit, and not only paid off the loan in the first two or three years. , and turned over profits equivalent to dozens of times the loan to the superiors. Although such enterprises belong to state-owned enterprises, the state has long since had no actual and direct capital investment.Therefore, as the representative body of state-owned assets, the SASAC should assume the functions of corporate shareholders to increase investment and invest new capital in order to obtain working capital for development.

Zhao Xinxian's remarks are actually a bet on his career.He boldly forced the State-owned Assets Supervision and Administration Commission to achieve two goals: first, the State-owned Assets Supervision and Administration Commission of the State-owned Assets Supervision and Administration Commission of the People's Republic of China would assume the role of an investor and inject 5 billion yuan into Sanjiu. If the shareholding system reform is carried out, then he and his team can take advantage of the trend to become the true masters of Sanjiu.Whichever of these two objectives is achieved is satisfactory.And the reason why he dared to do this is that Sanjiu has been under his control since its establishment, and no second person knows everything from personnel, finance to industry. Can people understand?

However, the development of the situation did not go as he wished.Sure enough, on May 16, just two months after his speech during the "two sessions" in Beijing, Li Yizhong, Secretary of the Party Committee of the State-owned Assets Supervision and Administration Commission, went to Shenzhen in person and suddenly announced that Zhao Xinxian was removed from the positions of general manager and party secretary of Sanjiu Enterprise Group.The public reason is that cadres under the jurisdiction of the State-owned Assets Supervision and Administration Commission must retire at the age of 60, and Zhao Xinxian is already 63 years old, and it is normal to resign and retire.At the same time, he gave Zhao Xinxian a very high evaluation, saying that he "has made outstanding contributions to my country's pharmaceutical industry and the development of Sanjiu Enterprise Group for 40 years."

Zhao Xinxian's experience once again proves how cruel an entrepreneur is. In 1995, as a distinguished adjunct professor, Zhao Xinxian was invited to participate in the New Year's Symposium of the School of Economics and Management of Tsinghua University.Zhu Rongji, then vice premier of the State Council and dean of the School of Economics and Management, said to him: "Don't worry, even if the Southern Pharmaceutical Factory collapsed, I would still ask you to be a professor. Why? Because you can sum up experience from here, how did the enterprise collapse? Yes. Of course I don't want to collapse." These words were leisurely, but there was infinite worry hidden.

In October 2004, the 43-year-old vice president of the Sanjiu Group, Chen Zhong, who had been favored by Zhao Xinxian, died suddenly of illness. When cleaning up his office, he found a huge amount of unidentified deposits; 9 audit matters, Group Vice President Rong Longzhang, Sanjiu Guangzhou Hospital President Cui Chonglin, Sanjiu Biochemical General Manager Zhang Xinrong, Sanjiu Automobile Company Manager Chen Dacheng, Sanjiu Engineering Company General Manager Lin Changxing, etc. were successively "double-regulated" or wanted.There are various indications that the problems of these three or nine ministers are all related to Zhao Xinxian.

According to later information disclosure, Zhao Xinxian was suspected of "transferring assets overseas".According to the information provided by the Companies Registry of the Hong Kong Special Administrative Region, Sanjiu has registered more than 50 companies in Hong Kong, all of which are "private companies". Zhao Xinxian has served as the chairman of many companies; Hundreds of millions of dollars of funds are missing.Professor Lang Xianping of the Hong Kong University of Science and Technology, after studying Sanjiu's financial situation, summed up Zhao Xinxian's "six tricks for making money": interception, borrowing, advance, set-up, embezzlement, and reliance. In addition to financial violations, Caijing magazine gave another observation: after Zhao Xinxian was suddenly announced to retire, his successor has been having difficulty in carrying out his work.On the one hand, Sanjiu's various businesses are showing signs of collapse, and it is not an exaggeration to describe it as "a chicken feather all over the place".The health city, which claims to have invested billions of yuan, was stillborn due to land approval issues, and the chain pharmacy project was unsustainable, so it had to be transferred at a low price of only 4 million yuan. In May 2005, Sanjiu Group sold its state-owned legal person shares of Sanjiu Development and Sanjiu Biochemical to two private enterprises in Zhejiang and Shanxi at prices of 35 million yuan and 205 million yuan respectively. A listed company withdrew completely, and the so-called "Three Nine Departments" collapsed.By autumn, there were media reports that the huge Sanjiu Group had more than 500 companies, which were divided into five levels of management from the head office to branch companies, and most of the companies at the third level had scattered out of control.On the other hand, in the face of such a complicated and arduous reorganization work, some old ministries of Zhao Xinxian are still occupying the "small hills", and they believe that Zhao Xinxian can come back again.Under such circumstances, relevant departments decisively "take down" Zhao Xinxian. In any case, Zhao Xinxian, who originally thought he could land safely, became the focus of attention again after more than two years of retirement. The process of Zhao Xinxian's arrest is as follows: On November 19, 2005, Zhao Xinxian went to the Summer Palace in Beijing. He was in a good mood that day and asked his family to take many photos along the way.When leaving the park, several police officers stopped him.The next day, Zhao Xinxian appeared in the Shenzhen Meilin Detention Center in the south.It is located in a very remote mountain depression on the south side of Bijia Mountain, surrounded by tall and straight eucalyptus trees and lychee trees with huge crowns.Zhao Xinxian was imprisoned in a cell that was only a few square meters. The window of the cell was very high. Looking out on tiptoe, he could see the vast starry sky in the south.Walk more than 1,000 meters eastward from this place, and then turn a corner, which is the place where Zhao Xinxian slept in the dog shed. From the dog shed to the cell, Zhao Xinxian walked for a full 20 years.