great-warnovel Chapter 256 Poison Pill Plan
Chapter 256 Poison Pill Plan
(A long chapter of 6,000 words~)
Chiyoda Ward, Marunouchi.
The core strategic room on the fourth basement floor of the Saionji Industrial Headquarters.
On the huge LCD screen, breaking news of the Tokyo District Public Prosecutors Office Special Investigation Department's arrest operation was being broadcast live.
"Currently, Congress has passed a resolution authorizing its approval. The former Secretary-General is suspected of seriously betraying national interests and has been taken into custody by prosecutors for investigation..."
On the screen, Ichiro Osawa's head was tightly covered by a dark blue suitcase. Amidst the frantic flashing of countless camera lights, he was forcibly pushed into the back seat of a black police car by two burly bailiffs.
Saionji Satsuki sat quietly in the main seat of the leather swivel chair.
She returned to St. Hua Academy today after a long absence, still wearing her custom-made high school uniform.
The dark blue suit jacket was impeccably tailored, with the school badge in silver thread on the left breast pocket, and a dark red ribbon neatly tied at the collar. Below, a grey pleated skirt lay flat against the edge of the leather seat. Her feet, encased in black calf stockings, were casually crossed.
Her long, black hair wasn't tied up with a hairpin as usual; it was simply draped smoothly over her shoulders.
She turned off the TV after watching only the beginning.
"Click."
The strategic interior was restored to a low-frequency, faint noise, with only the constant-temperature air conditioning running.
Satsuki placed the remote control steadily on the table.
The huge, pitch-black screen was like a deep mirror, reflecting her serene face.
Osawa Ichiro's downfall was largely in accordance with plan.
Soon, the media will step forward to portray Ichiro Osawa as a shameless politician who betrayed national interests, a despicable person who disregarded the interests of the people for his own selfish gain.
The hard landing that the Saionji family has been pushing for in recent months has indeed caused widespread corporate defaults and a wave of unemployment. If this anger is not vented, it could lead to even worse consequences.
So, Osawa-san, I'm afraid you'll have to put up with this a little.
For the future of Japan, you should make a glorious sacrifice.
After all... this can be considered "lasting fame".
At this moment, the heavy explosion-proof and soundproof door was pushed open from the outside by the staff.
Tadashi Yanai, the head of retail at Uniqlo and S-Mart, walked into the building side by side with Executive Director Endo, the group's chief financial officer.
The two walked steadily to the huge black lacquered glass conference table, stopped at the same time, and bowed slightly to the girl sitting in the main seat.
"Young Miss".
Tadashi Yanai held a thick market research report in both hands. His eyes always seemed bloodshot, but his suit jacket was still buttoned up meticulously.
"The Special Investigation Department has closed in; Ichiro Osawa has been confirmed to have been arrested and is currently being questioned."
Tadashi Yanai took a small step forward, placed the briefing steadily on the table with both hands, and slowly pushed it forward.
"In addition, we have just received confirmation from the Ministry of Finance that the repeal and amendment of the Large Retail Store Law has officially completed all legal procedures and been stamped with the official seal."
Executive Director Endo stood to the side. He adjusted his gold-rimmed glasses and took over the conversation at the opportune moment.
"In other words, the local chambers of commerce and industry associations' restrictions on the size of large shopping malls no longer exist at the legal level."
"The recent continuous decline in the market has put domestic real economy enterprises under extreme cash flow strain, leaving them with no extra funds for expansion. This has created a vacuum for foreign capital to enter the market."
He glanced at the briefing in his hand.
"The intelligence department has confirmed it. Walmart and Carrefour's advance teams have arrived in Tokyo. They have US dollars in cash that are not affected by domestic credit and are directly submitting applications to the Ministry of International Trade and Industry for land use rights for hypermarkets. They are preparing to take advantage of the domestic capital shortage and dump their assets on the market."
Satsuki leaned back in the leather chair.
She didn't look at the briefing on the table, but quietly stared at Tadashi Yanai in front of her.
How are the domestic giants reacting?
Tadashi Yanai lowered his head slightly, his mind quickly processing the information from the intelligence division regarding the movements of various parties.
"After the Ministry of Finance issued the 'Total Volume Regulation,' the cash flow of most traditional giants was tied up." Tadashi Yanai raised his head, his speech slightly faster. "The Seibu Group is currently tied up by its heavy assets in Hokkaido and simply cannot spare any extra working capital to keep up with its expansion into lower-tier cities. Ito-Yokado has also switched to a full-scale defensive strategy and is desperately trying to consolidate its existing convenience store base."
He reached out and turned to the next page of the briefing, his finger pointing heavily at a set of data highlighted in red.
"However, the Da Rong Group is an exception. Their actions are the most aggressive."
Tadashi Yanai paused for a moment, his expression becoming serious.
"President Nakano is currently facing immense debt pressure. In order to cover up the losses on paper by opening new stores and increasing revenue, he has no time to worry about defense. Recently, he has been frantically draining the last remaining reserve funds within Daiei."
"Currently, a large number of small and medium-sized shops in the Kanto and Kansai regions have gone bankrupt due to broken capital chains. Daiei's expansion department is closely monitoring this wave of sales, intending to conduct a large-scale acquisition."
Tadashi Yanai pushed the briefing forward half an inch.
"Miss, S-Mart and Uniqlo's offline expansion teams have been assembled, and we have ample cash on hand. Recent shop prices have fallen to less than 60% of last year's peak. I originally planned to apply for 50 billion yen in special funds to preemptively sign bankrupt shops in core business districts, blocking foreign capital and Daiei's expansion into lower-tier markets."
He paused, his brows furrowing slightly.
"However, after our legal team conducted preliminary due diligence and verified the documents with Mr. Masato's intelligence department, we discovered a very tricky legal blind spot."
Saionji Masato, who had been standing quietly in the shadows of the control panel, took a half-step forward at the opportune moment. He took out a blue folder and pushed it across the smooth glass tabletop.
"Miss, this is the underlying property rights penetration report that SIS Think Tank released last night."
Executive Director Endo leaned closer, his eyes quickly scanning the paper.
"Off-balance-sheet financing?" Endo looked at the intricate equity structure diagrams.
"Yes." Tadashi Yanai nodded. "These bankrupt businesses listed on the stock exchange have not only secured official bank loans, but have also privately pledged their shops to local credit unions, or even underground banks operating under the guise of financial consulting firms. SIS's report shows that over 70% of the low-priced shops have this kind of hidden debt chain."
Tadashi Yanai took over the conversation.
"If the physical transaction is completed without their knowledge, the debt collectors from underground banks and yakuza organizations will inevitably hinder the daily operation of the shop."
"Although we could use administrative power or have the security department forcibly remove various yakuza organizations, given the current state of public security, the acquisition team believes that this is not in our best interest and can only be considered as a backup plan."
"Therefore, I suggest that shops with hidden debt should not be a priority target."
Satsuki listened quietly to Yanai Tadashi's analysis.
"President Yanai's judgment was very accurate."
"We eliminate them. Our expansion team only acquires the top 30% of high-quality stores that have been thoroughly verified by SIS and have clean ownership."
Executive Director Endo looked at the report on the table and pondered for a moment.
"Miss, if I may be so blunt, Da Rong Group and foreign investors are frantically snapping up properties. If we abandon 70% of these target locations, their store density in the Kanto region will quickly surpass that of S-Mart. We will inevitably face increased resistance in lower-tier markets."
"Who said we're giving up?"
Satsuki leaned back in her leather chair.
"Since Da Rong Group and those Wall Street capitals are so eager to expand, let them do as they please."
"Uncle Zhengren, find a few asset brokers on the black market. 'Inadvertently' leak this list of 70% of the shops that have been filtered out and are tainted by usury to the market development department of the Da Rong Group. Also, send a copy to a few of the American advance agents."
Executive Director Endo stood to the side, his brows furrowed slightly.
Neither Da Rong nor the foreign investors were stupid enough to do this...
"Young Miss, that's probably not realistic." Endo took a deep breath. "Daiei's internal strength originated from the post-war black market. He even has connections behind several major yakuza organizations in Kansai. He knows the methods of yakuza loan sharks better than anyone else. As for the agents on Wall Street, they must be accompanied by a top-notch team of due diligence lawyers."
"If we suddenly give up so many prime locations, it will almost certainly arouse their suspicion. Once they launch a thorough investigation into the underlying property rights, this poison will be impossible to hide."
A few seconds of silence followed in the strategy room. Both Tadashi Yanai and Masato kept their heads down, remaining silent.
Satsuki looked at Endo with satisfaction.
As her authority grew stronger, she became virtually the only voice within the group. While this undoubtedly made the Saionji Group extremely efficient, it also inevitably led to instances of Satsuki making personal misjudgments.
Satsuki also found it strange. Did she look fierce? Why were they so afraid of her?
Satsuki doesn't consider herself an infallible god; she also has limitations, and listening to others' opinions is very important to her.
Currently, only Shuichi and Endo, who have always followed him, dare to openly and continuously refute his opinions.
However, Satsuki would never mistake her opponent for a fool.
"Executive Director Endo, you're right. Of course they'll investigate."
"Those top investment banks and private equity agents from Wall Street are backed by the best due diligence lawyers in the United States. The explicit mortgage records of the Ministry of Finance cannot conceal the financial traces left by those private financial companies set up by the Yakuza. As long as they delve a little deeper into the bottom, this poison will be exposed to the sunlight."
Executive Director Endo adjusted his gold-rimmed glasses, but the doubt between his brows did not dissipate.
"Since they were able to find it, then this list..."
“They will not only find out,” Satsuki said, picking up a bone china teacup from the table. “But when those Wall Street fund managers see these bankrupt shops with loan shark debt, they won’t back down at all. On the contrary, they’ll be excited.”
Yanai sat at the long table, leaning slightly forward.
"Excited?" A hint of confusion flashed in Yanai Tadashi's eyes as his rough fingers lightly rubbed the table. "Young Miss, why is that?"
"President Yanai, American gangsters are far more ruthless than the Japanese Yakuza. They have far more experience dealing with gangsters than we do."
Satsuki took a sip of tea and gently placed the teacup back on the saucer.
"On Wall Street, there's a type of institution that specializes in hunting these toxic assets, called 'troubled asset investment funds' (essentially 'vulture funds'). American financial giants in New York and Chicago have long dealt with the Italian Mafia, which controls construction unions and scrap metal recycling. Their experience dealing with low-level gangs is even greater than that of the Tokyo Metropolitan Police Department."
"In their cognitive model, assets with gang debt mean they can use them to ruthlessly drive down prices in bankruptcy court and from the original owners. They see this as a perfect 'bargain' opportunity." (The general idea is: buy distressed assets cheaply -> use top bankruptcy reorganization lawyers to litigate and force creditors to settle -> remove legal flaws in the assets -> sell at a high price after the market price returns to normal)
Satsuki looked at Endo and Yanai, her fingers crossed in front of her.
"They firmly believe that as long as they rely on their substantial dollar capital and hire the top legal teams in Japan, they can, just like in North America, physically launder their assets in a few months through powerful court injunctions and violent evictions, and then sell them at a high price."
Inside the strategic room, the exhaust fan emitted a faint, low-frequency hum.
Executive Director Endo's breathing gradually slowed down as he followed Satsuki's logic. Suddenly, a sharp glint flashed in his eyes.
"Court injunction...time."
Endo stared directly at Satsuki, his speech quickening.
"Young lady, is your trap a result of Japan's inefficient legal system?"
Satsuki nodded slightly, her smile deepening a little.
"That's right. Wall Street funds, accustomed to the efficient commercial litigation in New York, will always hire top lawyers to go through the court proceedings when they encounter a basic dispute in a foreign country."
"In their model, all they need to do is dump these shady debts with yakuza ties onto the Tokyo District Court. By leveraging their capital, they can obtain a legal eviction order in just a few weeks and completely launder their assets."
"But they have no idea about Japan's Land and House Leasing Law."
Endo suddenly realized.
"This law provides almost pathological protection for actual occupants. Those yakuza groups don't even need to use steel pipes and baseball bats to splash red paint on the front door. They just need to put a broken table in the shop, have a thug sit there, and claim to be a legitimate tenant with a history of lease disputes."
"When top Wall Street lawyers walk into the Tokyo District Court with an eviction order, the judge will absolutely not issue an immediate enforcement order for reasons of 'social stability.' Instead, he will initiate round after round of lengthy and indefinite pre-trial mediation."
She tapped the armrest of the leather seat lightly twice with her fingertips.
"Wall Street private equity funds have extremely stringent requirements for internal rate of return (IRR) and capital turnover cycle. Assets that they thought could be laundered and cashed out in six months will have their liquidity frozen for three or even five years while they are on trial in a Japanese court."
"This is the most deadly poison. As time goes by, it will drag those dollar-denominated capitals that pursue ultimate efficiency to death in the quagmire."
After listening to this analysis, Executive Director Endo nodded repeatedly.
But a moment later, he asked another question.
"Young Miss, Wall Street might fall into traps due to a lack of understanding of Japanese law. But... what about President Nakauchi of the Daiei Group?"
"Zhong Neigong fought his way up from the Kansai black market after the war. He knows the 'Land and House Borrowing Law' and the methods of the Yakuza like the back of his hand. If he saw the hidden dangers behind these shops, he would never have gone through the long court process. With Daiei's connections in the Kansai underworld, they could have directly gone to the Yakuza's higher-ups to negotiate privately and settle the dispute."
"He would definitely do that."
Satsuki's gaze was calm.
"During a period of economic prosperity, Zhong Neigong, with the size and influence of Da Rong, could get those low-level finance companies to obediently withdraw from the shops with just a small settlement payment."
"But he overlooked the fact that the 'Total Regulations' recently issued by the Tibet Autonomous Region are cutting off more than just the financial support for real estate developers."
Satsuki leaned forward slightly.
"The principal used by yakuza organizations to engage in usury mostly comes from covert bridge loans from legitimate financial institutions such as 'Zhuzhuan (a residential finance company)'. Now that banks are frantically withdrawing loans, Zhuzhuan itself is struggling to survive and is relentlessly demanding repayment of the principal from the yakuza."
"The Kanto Yakuza is currently facing a life-or-death crisis: its funding chain has completely broken down and the organization is about to go bankrupt and be liquidated."
"When it comes to survival, the prestige of internal strength can't buy a single penny of real money. These shops are practically the last collateral the Kanto Yakuza can use to extract cash. Whoever dares to take them on will be met with a vicious, ravenous attack from them, with absolutely no room for compromise."
A deathly silence fell over the strategic room.
Da Rong's underground negotiations will fail, and Wall Street's legal eviction efforts will stall. These 70% of the shops have become untouchable minefields.
Saionji Masato, who had been standing in the shadows of the control panel, spoke up at the opportune moment.
"Miss, if we just hand over these prime locations to them for no reason, they might suspect something is amiss."
He looked toward the head of the table.
"We need to give them a reason. A perfect excuse for the Saionji family to be 'forced' to give up these lucrative opportunities due to their own reasons."
Satsuki leaned back in her leather chair.
"Uncle Zhengren, have you forgotten about that bill we had in New York?"
Executive Director Endo stood to the side, his mind quickly flashing back to the transnational case that had just been concluded.
"Solomon Brothers did indeed use their connections in Washington to help us unfreeze that fund. Da Rong and Wall Street's intelligence network must also know that the money has been unfrozen."
"However, a full billion dollars of offshore bridging funds were frozen by the Americans for such a long time." Endo's speech gradually quickened, and his gaze sharpened. "For any company that is expanding rapidly, this level of cash flow disruption will have an extremely destructive impact on the group's overall financial situation and the payment schedule of various prepayments."
Satsuki nodded slightly.
Endo, observing the situation, added further.
"In addition, the Ministry of Finance issued the 'Total Quantity Regulation,' which completely shut down the domestic bank credit gates. The deep-sea caisson operation of the 'Saionji Pagoda' in Odaiba, with the special concrete dumped into the sea every day, is an absolute cash black hole."
Endo looked at the blue document on the desktop.
"Have the employees who aren't getting their commissions because the acquisition stalled go 'secretly' to sell the list to black market brokers. And while they're at it, have them add a few complaints."
"They say that because that billion dollars was frozen for too long, the group's cash flow was severely damaged. Now the banks have stopped lending, and Odaiba is still burning through cash like crazy every day. The Saionji family simply can't come up with a large amount of readily available cash, and they can't even raise enough for the prepayment for these shops, so they have to give up..."
Satsuki nodded slightly from the side.
"Yes, that's right. President Yanai, let's proceed accordingly."
Tadashi Yanai stood up and bowed slightly.
"I understand. I'll arrange for the team to depart immediately."
……
……
……
The poison pill plan that Satsuki deduces in this chapter, which uses Japanese law and yakuza to "drag down" Wall Street capital, is not a conspiracy theory fabricated by the author for the sake of pleasure, but a true financial history that took place in Japan in the 1990s.
After the bursting of Japan's bubble economy, Wall Street-based European and American "vulture funds" (such as Lone Star, Cerberus, Goldman Sachs and Morgan Stanley's Special Opportunities Fund) did indeed flood into Japan, attempting to use the US dollar to buy up extremely cheap non-performing loans (NPLs) and bankrupt properties.
But Wall Street elites, accustomed to the efficient commercial litigation and eviction system in the United States, encountered a shady gray industry in Japan that caused them unbearable pain – "Senyuya".
At the time, Japan's Land and Property Leasing Law and Civil Enforcement Law had huge loopholes in their "short-term lease protection," which were extremely biased towards protecting the actual occupant (tenant). Yakuza members and deadbeats could simply place a broken table in a bankrupt property facing foreclosure, or send a thug to live there posing as a "legitimate tenant." After foreign investors bought the property, they would take an eviction order to court, and judges, for reasons of "social stability," would often require both parties to engage in lengthy and indefinite pre-trial mediation.
Foreign investors who want to regain physical usage rights will not only be dragged into a legal quagmire that can last for 3 to 5 years, but will also have to pay exorbitant "relocation settlement fees (immediate refunds)" to gangsters.
In real history, while giants like Goldman Sachs and Lone Star ultimately weathered the growing pains of those years thanks to the massive dollar reserves of their parent companies (though their early financial models' IRRs were severely damaged), many small and medium-sized independent European and American real estate private equity firms, overseas investment funds, and speculative conglomerates that blindly rushed into Japan in the early to mid-90s to "pick up bargains" simply could not withstand years of frozen funds.
Their financial chain was broken during a lengthy court-mediated settlement in Japan, their internal rate of return (IRR) plummeted into negative territory, and they were forced to sell their toxic assets at a loss and withdraw from the Japanese market in despair, truly "dragged to death" in this quagmire.
This practice of gangs exploiting legal loopholes to extort foreign capital was rampant in Japan during the 90s, resulting in Japanese banks holding trillions of yen in bad debts that they couldn't sell (foreign investors were too afraid to take over). Ultimately, this forced the Japanese government to amend the Civil Enforcement Law twice, in 1999 and 2003, abolishing the loopholes protecting short-term rentals, thus ending the era of exploitative "occupied housing."