Chapter 1121: Poor Necessity

Sometimes the responsibility for the emergence of problems lies not with the central government nor with Asia, but with the local governments in the middle.

Or some people say that this statement is untenable. What does the company's affairs have to do with the local government? In fact, this is exactly the case because local governments want to pursue political achievements. If an enterprise as big as Yili does not take action when comprehensively promoting enterprise restructuring, it means that the local government has not done its job well.

But in fact, the local government is not concerned about anything other than political performance. Therefore, whether there is any shady or fishy story about Yili's restructuring is not what they are concerned about.

However, if Yili does not restructure, then the local government will have to bear certain responsibilities for its shortcomings.

The predecessor of Yili Co., Ltd. was Hohhot Hongqi Dairy Factory. In 1984, it was renamed Hui Dairy Food Processing Factory. In 1992, it was restructured. In September 1995, 17.15 million public shares were issued. Listed in 1996.

Zheng Junhuai served as factory director successively. Chairman of the General Factory Changfei Co., Ltd. President.

Like most first-generation entrepreneurs in China. Zheng Junhuai contributed a lot to Yili's development from a dairy processing plant in Inner Mongolia to the undisputed leader of China's dairy industry. It can be said that without Zheng Junhuai, there would be no Yili.

Yili has always been a representative of blue chip stocks.

According to the current quarterly report, Yili's main business income in the first half of the year was 4.5 billion and its gross profit was 250 million. The total share capital of Yili Co., Ltd. is 1.9 billion. The performance of a single share has reached 64 cents. What is even more valuable is that such performance was achieved due to the continuous transfer and high expansion of share capital. Now Yili's outstanding shares are 200 million. The 50 million shares have increased nearly fifteen times compared with the initial listing.

Yili shares are not only a blue chip stock but also a blue chip stock that can bring solid returns to investors.

When you open the archives of Yili Shares, you can clearly see that since the listing of Yili Shares, Yili Shares has not stopped distributing cash dividends, even when the ten-for-ten plan was implemented.

Although the amount of funds raised by Yili through allotment and refinancing after listing is not a small amount, its insistence on paying cash dividends to investors every year can be said to be unique in the listing, and the cumulative amount of cash dividends is not a small amount of investment in Yili shares. The investors have indeed been richly rewarded.

All this shows that Zheng Junhuai is a businessman and a chairman who can bring returns to investors. This is fundamentally different from other listed companies that play with capital operation methods.

But now Zheng Junhuai and his senior management team are facing two charges of false performance and misappropriation of funds. These two charges have destroyed Zheng Junhuai's halo.

The direct consequence of the misappropriation of funds is definitely not the investment in treasury bonds, which exposed the illegal shareholdings of Yili's senior executives.

At the end of 1999, in order to solve the problem of management shareholding, Yili Co., Ltd. renamed middle-level managers Zhang Xianxian and Li Shuihui to establish Huashi Trading Company to accept the transfer of legal person shares.

This year, the company increased its capital to hold more than 8.4 million legal person shares in the name of family members of Yili executives. Became the fifth largest shareholder of Yili Shares. Many days later, the shares of Huashi Trading were transferred to Hohhot Qiwu Investment Company for management incentives. Although Yili's clarification announcement stated that the delay in the transfer was due to the CSRC's promulgation of regulatory opinions on the agreement transfer of non-tradable shares of listed companies, Yili Co., Ltd. was unable to explain where the management's acquisition funds of 15 million yuan came from.

Although Yili is still a popular brand in the consumer market, the competition in the dairy market has become fierce, which is very different from the era when Yili became famous. Yili's profit margin will definitely decline. In fact, Yili has never denied it.

Although Meng Gensheng, the boss of Mengniu who left Yili, was originally the sales general manager of Yili, Mengniu’s growth and expansion energy are not inferior to Yili’s peak period. Especially after Mengniu went public, it stood on the same starting line as Yili. The market channels for the flight production line of the two base companies are very similar. It is obvious that Mengniu is squeezing Yili.

Another hidden pain that Yili Co., Ltd. has made unforgettable for the Beijing press is that it used a public relations company to slander and slander Mengniu's product quality and safety issues. Almost all the so-called mainstream media are put into the cover. Although this incident is not directly related to performance, it shows that Yili's market competition has reached the point where it uses all possible means to do anything. Zheng Junhuai's mentality has suffered a major change.

Some people say that the trouble Zheng Junhuai has caused so far is nothing more than Fan Wubing. After analyzing it, he thinks that although it seems that someone set up a trap, what Zheng Junhuai has is still his own ambush. After all, if you have a selfish personality, you will not continue to be noble. After all, it is illegal to pretend to be public for personal gain. The same applies abroad.

It is not terrible that the uneven distribution of the process is not terrible. It is only a matter of time before the mines are exploded.

The independent director who parted ways with Zheng Junhuai pointed out the core of the Iraq incident. This is not the true meaning and is not for the management's help. If it is for the entire management to implement it because of their hard work, we will not go back. But if it is just for one One or two people's words won't do Erie any good."

As the investigation deepens, it turns out that a financial trust company unilaterally holds 14% of Yili's shares. It happens to be at the center of the whirlpool of the Iraq incident. A lot of suspicion is directed at this trust company. There are reports that this trust company The trust company is Zheng Junhuai's share holder this time, if such accusations are true. Then the trust company's troubles probably don't matter whether they knew about it or not. After all, they actually helped Zheng Junhuai launder money.

No matter how much money Zheng Junhuai misappropriated, there is no doubt that most of the rights and interests of these funds belong to circulating shareholders, because the total amount of funds raised by Yili shares is as high as 800 million yuan. Yi's corporate governance structure flaws are not unique. A considerable number of more than a thousand listed companies in China still belong to the Yiyantang management model. Company shareholders, especially circulating shareholders, contribute the most and suffer the most. The most numerous group. The lack of spokespersons and the loss of the right to speak were most vividly demonstrated in the Yilipeng Incident.

Maybe new management of the company and the local government. Can claim to be protecting investor rights. However, in fact, if there is no fundamental adjustment to the corporate governance structure, the new company management will sooner or later become pessimistic. After all, only those who manage their own money will be most attentive to "regret". However, the real money of Yili's circulating shareholders I'm afraid I will continue to have no choice but to entrust others to protect me.

Fan Wubing has always been very concerned about Yili Xu. They often inquire about the progress of the case, and when Fan Heng gets the latest report, he will also inform his son for reference. As the father and son conduct in-depth observations, they find that there are still many problems.

As bystanders, the biggest question for Fan and his son is that the well-known entrepreneur Zheng Junhuai, who is covered with sacrifices, is expected to be elected as the next member of the Central Committee. Why so urgent? He actually took risks and broke the law.

In fact, this is related to Mengniu. Niu Gensheng was exiled and resolutely left Yili to create Mengniu Dairy. for several years. The sudden rise of Mengniu is getting closer and closer to Yili. Especially this year, Mengniu has made further progress after attracting foreign investment. It is no exaggeration to say that Mengniu, which takes advantage of the power of foreign investment, is the only real opponent that can threaten Yili's survival.

Zheng Junhuai, a well-known entrepreneur who has been involved in the dairy industry for twenty years, felt the fear of total failure. Why. Because he knows best that although Yili is firmly at the top of the industry, it has a fatal weakness. Capital Structure The acquisition of Yili can be accomplished with a maximum of RMB 600 million in cash.

Niu Gensheng was exiled from Yili by Zheng Junhuai, and he had long wanted to annex Yili. Niu Gensheng once publicly said that Mengniu and Yili would get together sooner or later, which is enough to show that he did not conceal his intention to acquire Yili.

Yili's stock price has fallen sharply since the establishment of Mengniu. The stock price has been stagnant. Yili's stock price has been outperforming the market since its listing. However, after the establishment of Mengniu, Yili's stock price underperformed the market index. This can reflect that Weichang investors are worried about the threat of Yili when Mengniu.

This year, Mengniu has received more than US$60 million in investments from foreign capital. There is no doubt about it. If Mengniu's acquisition of Yili succeeds, Zheng Junhuai and his Yili management will most likely be expelled from Yili and laid off to find another career.

As a result, Zheng Junhuai and others could not but feel scared.

If Mengniu acquires Yili, as a spectator, no matter who wins or loses, it will be beneficial and harmless to the China Dairy Industry Exhibition. But for Zheng Junhuai personally, it is a very serious problem.

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As for the so-called gambling agreement between Mengniu and foreign investors, there is no risk at all. They are more like drivers in the driver's seat. Easily driving a bullock cart, the people on the cart's shaft are Mengniu's management who are running for their lives for tens of millions of share rewards in a year's time.

But Mengniu has annual sales of only 4 billion. How can we achieve a leap in sales reaching over 12 billion in one year? Acquiring other strong competitors and directly integrating other people's sales seems to be the only way to win.

The acquisition of Yili is naturally a very cost-effective deal. At most, more than 600 million yuan can be used to swallow up Yili's annual sales of nearly 10 billion yuan. The annual net profit is nearly 100 million yuan. Moreover, the tradable shares exchanged can still be mortgaged or liquidated at any time. To whom does this good deed benefit the most?

Is there anyone other than Mengniu who is the most powerful and has the most impulse?

By analyzing the profit and loss relationship between foreign capital and Niu Gensheng in the process of Mengniu's capital operation, we discovered a problem. Niu Gensheng and his management team have always been in a passive and desperate situation in every step of Mengniu's listing. Foreign capital will get from the stocks of the listed company. The amount of profits is undoubtedly a drop in the bucket compared to their equity plan to reward Niu Gensheng and other management.

There is no doubt that the relationship between Mengniu and foreign investment cannot be described as a strong alliance. It is more appropriate to describe it as severely undercut.

Facing the future situation of China's dairy industry, Fan Wubing is also worried about this. After all, the sales volume from 4 billion to 12 billion means that it must reach a height that no one has ever reached in China's dairy industry, and this will inevitably lead to competition with other companies. Milk war among dairy giants. Mengniu has recently been in a price war with Yiwu. A price war broke out between Yili. It also reflects that this deep-seated contradiction and vicious competition has begun to affect Mengniu's performance growth.

The other protagonist of the story, Zheng Junhuai, is also in a passive fighting position in this game. If he continues to maintain the high integrity of a state-owned entrepreneur and does not consider using public funds to make money, then the cost of Mengniu's acquisition of Yili is minimal. He only needs to transfer the 28 million state-owned shares held by the local government in Hohhot City, and Mengniu can easily gain control.

But Zheng Junhuai must protect himself. He has always been a dedicated state-owned enterprise cadre. It is impossible for him to have a net worth of hundreds of millions. You can only use the company's public funds.

Either sit back and wait for death or make a desperate move. Zheng Junhuai chose the latter.

In this sense, the domestic capital market is still a wasteland. Under the situation of severe shortage of financial tools, Chinese entrepreneurs are trying to achieve their own survival and development. Whether it is Niu Gensheng, who helps multinational capital complete its continuous layout in China at the expense of the ownership of the company, or Zheng Junhuai, who uses the company's public funds to invest. There is no winner in any game.

After reading this information, Fan Wubing couldn't help but sigh, and then his father Fan Heng said earnestly. Probably what the remaining old and difficult enterprises in the country that cannot be restructured need most is cash flow support. Or I should consider setting up an investment company and selectively help entrepreneurs realize their goals. This is better than having to invest in foreign capital and accept the most demanding spare parts just for a few bucks because they have to raise funds smoothly. The money he needed was taken at all costs and his mother was imprisoned by mistake. "

Or maybe it's a good idea after all now the remaining large state-owned enterprises want to complete Peng. The only way is through the investment company model. But there really aren’t many big capital companies in China that are willing to do this. Even if there were, the conditions would be very harsh. I personally support your doing this. " Van Henken said.

But to put it simply, if you want to formally handle this matter, you still need some effort. For example, it is very important to straighten out this relationship through official channels.

Fan Wubing believed that if he showed everyone the example of Yili's assistance in the case, there would be no resistance to the matter.