Extraordinary Genius

Chapter 888 – Get listed

Feng Yu rubbed his chin and thought for a while. “Actually, there is still a solution that might be against the regulations. However, it is definitely useful.

Against the regulations? Zhang Ruiqiang hesitated. At his age, he still can move upwards. If he violates any laws, his career might end even if he had achieved results.

But Zhang Ruiqiang thinks again. He might not be the one who violates the regulations. Why did the province appoint an almost retired Deputy Provincial Governor to head the state-owned enterprise reforms? The leaders must be worried about this.

If necessary, use extreme measures to solve this problem, and if anything goes wrong, someone else will be the scapegoat.

“What’s the solution? Tell me.”

“Two words, get listed!” Feng Yu smiled and replied.

“Get listed? You are saying we get listed on the stock market?” Zhang Ruiqiang asked puzzledly. What solution is this?

This brat mentioned about violating the regulations. Does he mean that getting those enterprises listed illegally?

“That’s right. The companies can get financing after getting listed. Why so many of the state-owned enterprises cannot be reformed? It’s because they don’t have money. Why can’t they develop and grow? It’s because they don’t have good equipment. In conclusion, they have no money. After getting listed, they will raise enough funds to get new equipment, technology, and repay their debt. They will also have enough money to get enough resources. The price they have to pay is only giving out some dividends to the shareholders and lesser authority.”

The capital market is the companies’ financing platform, and it’s beneficial for the companies’ growth and protects the country’s interest.

State-owned companies’ reforms cannot be separated from the capital market. The funding, reformation and loan model is not wrong, but it’s too limited.

The higher-ups are still very conservative towards this reform. Especially on the privatization of state-owned enterprises.

To Feng Yu, rather than letting these state-owned enterprises depending on the government for funding every year, they should sell them to private entities. This way, the government can recover some money and still get taxes every year, instead of spending money to feed them. What’s the point of keeping these money-losing state own enterprises?

These are not essential enterprises, and there’s no difference between state-owned and private. For instance, a handkerchief factory. Why can’t the government sell it to a private entity? Convert it to a shareholding and then let the state-owned officials interfere with the factory’s operation? It will still be the same as before. If there is someone in the state-owned enterprise who can bring the factory out of their current situation, this factory will not be in this pathetic state.

Those useless leaders in the state-owned enterprises should be transferred away, demoted, and get salary cuts. Whoever that is unhappy, investigate them. None of them are clean in the first place.

But now, the government is still stuck with these state-owned enterprises. They did sell some state-owned enterprises in the past, but the civilians and workers felt the state-owned enterprise’s leaders are selling away the government’s assets and have taken benefits from the buyer illegally.

Did the leaders really get benefits from the buyer? Of course, but not all leaders will get any under table deals. Some leaders sold the state-owned enterprises to solve this problem.

Feng Yu also have to bear some responsibility for what’s happening right now. All the leaders in the province said. Look at Bing City’s reformations. Bing City Machinery Company, Bing City Pharmaceutical, etc. After their restructuring, its profits, taxes, and value increased, and the city government did not spend much.

Even the big enterprises in Bing City can do this, why can’t these small enterprises be successful?

Sometimes, reforming a large enterprise is easier than changing a small enterprise. Large enterprises are more competitive, and small enterprises might not even export their products out of the city, let alone the province or overseas.

Zhang Ruiqiang was deep in thoughts after hearing what Feng Yu said.

Getting listed is a good solution. After the enterprise is listed, it will still be under the government’s control. This will stop those people from objecting, and there will be funds to clear the debts. Most importantly, the government doesn’t need to spend money!

“Tell me the details. How are we going to do this?” Zhang Ruiqiang asked.

“Simple. Just merge companies in the same industry, fulfill the listing conditions, and then apply to be listed!”

“Fulfil the listing’s conditions? Zhang Ruiqiang was confused.

“Merge the quality assets, remove those non-performing assets, and apply for bankruptcy.”

“Wait. Why are you talking about bankruptcy again?” Zhang Ruiqiang interrupted.

“Fine. We can also do without applying for bankruptcy. We need to create something that will attract people to invest in. For example, those electronic factories and semi-conductor factories, you mentioned earlier. If their technology fits the criteria, I can give them some orders to produce parts for Aiwa’s Mobile Phone. This way, there will be investors who think this enterprise is profitable and invest in it.”

“After they invested, the investors will not be satisfied with the enterprise’s profits, and they will hope this enterprise will get listed. This is where you need to make some changes to the account, like stating the enterprise does not need to repay their debts in the next 3 years, etc. This way, the enterprises will need the requirements to be listed.” What Feng Yu said is getting venture capital.

“What?” Zhang Ruiqiang is shocked. “You are asking us to forge our accounts?!”

“It does not necessary to be fake. You all can just don’t include some of the enterprise’s debt in the account. There are lots of loopholes you can make use to get listed.”

Feng Yu sighed. China still does not have the Growth Enterprise Market. In his previous life, the Growth Enterprise Market was introduced next year and only targeted high-tech enterprises. But the Growth Enterprise Market had started in Hong Kong. The companies that can’t be listed in China can choose to get listed in Hong Kong.

In Feng Yu’s previous life, many companies that did not meet the listing requirements managed to get listed, and this is because the government had interfered. If others cannot do this, we can, as long as we can answer to the shareholders.

“Are there other options?” Zhang Ruiqiang frowned and asked.

“Yes. You can buy a shell company or get listed through the backdoor. That means you can acquire a listed company’s shares and use your assets to merge that that listed company. After that, you reissue shares and use the fund collected to develop those enterprises.”

Zhang Ruiqiang was getting giddy from Feng Yu’s suggestions. “Alright, alright… do you have anything simpler?”

“If there is a simple solution, the government would have thought of it. But there is still one more solution which might work. Change the hiring procedures of the managers and replace all current management staff. Let the new professional manager have full control over the enterprise and offer him high salaries and shares, in exchange for him to come up with strategies to turn the company over. There are lots of people like this, and it is up to you all to find them.”

Feng Yu said and saw Zhang Ruiqiang looking at him. Feng Yu laughed. “Which enterprise can afford to hire me? Even if they can afford, do you think I will work for them?”

Actually, Feng Yu has no confidence in managing a company. He knew himself well, and managing a small company is fine. But he can’t handle a large enterprise.

“I am not talking about you. Your companies have such managers, right? Lend us some of them.”

“Don’t even think of this! Those useless enterprises want to poach my people? My men, who are capable, have my companies’ shares. Those that do not have company shares and still holding management roles are young managers, and we are grooming them. You can poach people, but don’t even think about poaching my people! If not, the province can forget about getting my donations in the future!” Feng Yu almost jumped up from his from the sofa.

Damn! I am offering you suggestions, and you want to use my ideas on me?!

Translator’s notes:

Capital markets