Chapter 212: 10 K10 Contracts

Li Xiao’s eyebrow twitched at the request. He immediately sensed this wasn’t going to be simple.

‘What could be so sensitive that it can’t be discussed over the phone?’

His interest in what the man wanted to discuss was instantly piqued.

‘There’s definitely something fishy going on for them to be this secretive.’

After a moment’s thought, he agreed to a face-to-face meeting. They arranged to meet at a quiet coffee shop.

Li Xiao drove his 911 and quickly arrived at the designated café.

The café was practically empty, save for a barista behind the counter and a single middle-aged man sitting in a corner.

The middle-aged man was wearing a well-tailored suit, his eyes constantly scanning the view outside the window.

When the man saw Li Xiao enter, he quickly stood up and hurried over to greet him.

He extended both hands and introduced himself.

“You must be Mr. Li Xiao. I’m Zhu Huichang. It’s a great pleasure to meet you today.”

It’s hard to be rude to someone with a smiling face, especially one as enthusiastic as this.

Li Xiao also shook his hand and exchanged a few pleasantries.

He casually ordered an iced Americano and got straight to the point.

“So, Mr. Zhu, you seemed quite eager to meet. What’s this about?”

Zhu Huichang said with a chuckle,

“To be honest, it isn’t me who wanted to see you. It’s the shareholders I represent who are seeking your support.”

“Mr. Li, the reason we sought you out is that there’s a major issue that requires a vote at the upcoming shareholders’ meeting. This issue concerns the future direction of the company’s production.”

‘Just as I thought,’ Li Xiao mused. ‘Contacting me this late at night… it’s definitely about the shareholders’ meeting in three days.’

Zhu Huichang continued,

“The meeting in three days involves a key decision: whether to change the raw material suppliers for some of our production lines.”

“The shareholders I represent support the change. The reason is that our current supplier’s raw materials are no longer up to modern standards, and their prices are too high, which inflates the company’s production costs.”

“If we switch to the new supplier, our overall production costs can be reduced by 12.8%.”

“After switching to the new supplier, the company’s profit margin will rise, and as a result, the annual dividends for shareholders will also increase.”

“Mr. Li, you hold 0.4% of the shares, which makes you a prominent figure among the individual shareholders.”

“We hope that you, Mr. Li, will take the lead and approve this decision, which benefits both the corporation and its shareholders.”

Li Xiao sneered inwardly after listening to the man’s pitch.

‘He certainly knows how to make it sound appealing.’

While he had never been involved in production for a major corporation, he did have common sense.

‘If their plan was really that good—a direct 12% reduction in production costs—no shareholder would refuse such a great deal.’

The pricing for bulk commodities was largely transparent. Even between different companies of the same size, quotes for the same raw materials rarely fluctuated by more than 2%.

‘Yet this proposal could supposedly cut costs by 12%. With a gap that absurd, something was definitely off.’

Li Xiao asked impassively,

“So, what’s the current consensus among the shareholders?”

Zhu Huichang didn’t hide anything. He knew the matter had already caused a stir, and Li Xiao could easily find out the details if he wanted to.

“The major shareholders are deeply divided on this issue.”

“The vote is split 49.52% in favor to 49.57% against.”

“Most of the remaining shares are held by individuals. Right now, your 0.4% stake has become the tipping point. Your decision could sway the entire outcome.”

“The shareholders I represent are very eager to have your support.”

The corner of Li Xiao’s mouth twitched. He hadn’t thought his 0.4% stake would be of any consequence, yet here was this dramatic turn of events.

He had no interest whatsoever in whether he could earn more dividends from his shares.

On the contrary, Haitian Flavors was one of the top three condiment corporations in Xia Country. Its sales volume was massive, and it had a huge customer base.

‘Drastically cutting corners on production would inevitably lead to a drop in product quality.’

Li Xiao considered this calmly for a moment before saying to Zhu Huichang,

“The information you’ve provided is valuable, but I need a more complete picture. That includes the quality of the raw materials from the new supplier, and whether this change will affect the quality of the final product.”

Zhu Huichang seemed a bit anxious. He answered quickly,

“The new supplier’s raw materials are cheaper, but they meet the basic quality standards. It won’t have a major impact on product quality.”

“Additionally, as long as you agree to the change in suppliers…”

“…we can offer you, Mr. Li, ten five-year contracts for K10-level positions.”

“At Haitian Flavors, a K10-level position or higher comes with an annual salary of at least one million.”

“Mr. Li, you could give these positions to your friends and family, and let them ‘contribute’ to the corporation.”

“Furthermore, after we switch suppliers, the annual dividend yield on your shares will increase by about 8% to 10%. That’s also a considerable sum.”

Li Xiao couldn’t help but sneer inwardly at his words.

‘What a clever scheme.’

‘Ten K10-level contracts. That meant Haitian Flavors would be spending an extra ten million, or even more, every year.’

‘Contracts for positions like these were highly sought-after on the open market.’

‘These were cushy, “parachuted-in” executive jobs. Anyone with a brain knew they were just for cronies.’

‘Once signed, they basically guaranteed a salary for doing nothing.’

‘On top of that, these placeholder executives had the backing of board members. As long as the person who took the job wasn’t a complete idiot, they could coast indefinitely.’

‘An annual salary of one million meant five million over five years. Add in the various benefits that came with the position, and the total earnings would be at least six million. More importantly, these cronies wouldn’t be expected to do any real work.’

‘One of these special crony contracts could easily be sold for an exorbitant price of two or three million.’

The reason Li Xiao considered it a clever scheme was simple.

The terms Zhu Huichang offered were incredibly generous, yet he and his faction wouldn’t have to pay for it themselves.

After all, the executive salaries would be paid from the corporate coffers, not out of the shareholders’ own pockets. If the payroll became bloated later, they could just fire some unconnected employees to balance it out. And in return, they would pull Li Xiao over to their side.

‘If it were really that simple to cut production costs and increase profits, why would nearly half the shareholders be against it?’

Li Xiao figured his suspicions were probably correct: the shareholders backing Zhu Huichang wanted to switch to an even lower-quality supplier.

‘Fortunately, not all the shareholders were so short-sighted. Using inferior ingredients could certainly cut costs, but it would also diminish the product’s quality. Over the long term, that would undoubtedly damage the corporation’s quality and reputation.’