Chapter 345 Disaster strikes
It was still a little chilly in the mornings and evenings in Jingyue City on June 6. He Yu carefully smoothed the wrinkles on his thick suit, buttoned up his suit, straightened his back, walked through the parking lot and entered the headquarters building of Wogu Agricultural Machinery.

When he met employees along the way and asked them good morning and said hello, he nodded slightly without smiling.

As the saying goes, what the superior likes, the subordinates will like even more. As the secretary of the board of directors of the first listed holding subsidiary of Yunshan Group, he is responsible for all capital market businesses of the company and is naturally close to Mr. Xie.

The young master of the group is always dressed in formal attire, so He Yu never allows himself to appear in the company in a sloppy manner. He must deeply learn the working spirit and keep up with the pace!
After all, it is still a second-tier city. The overall workplace environment has limitations, and the company is still tacky even after it went public.

He Yu secretly sighed at the employees who were dressed casually along the way, until he approached his own area and his slightly frowned brows relaxed. The exquisite formal attire of several employees in the office was really an eye-opener.

Very good, these are the soldiers under my command. He Yu couldn't help but reveal a reserved smile of approval.

"Mr. He."

A young girl wearing a Dior business suit, classic Van Cleef & Arpels jewelry, and a Loewe scarf tied around her neck in a unique way, greeted with red eyes.

"What's going on?" He restrained his expression.

When the little girl heard this, she opened her mouth but no sound came out, tears instantly welled up in her eyes and she started sobbing.

"An investor called and asked us why our stock price was falling. His words were very unpleasant and he asked us to issue an announcement to explain the situation to all shareholders." An old colleague at the side could not hide his disdain as he explained on his behalf.

"It's not just our stock price that's falling, the entire stock market is falling. Why don't you ask us why our stock price is rising when it's rising?"

He Yu comforted him in a gentle voice: "Mr. Xie said that the domestic financial market is still immature. This is a wise opinion that everyone should take to heart. In your life, do you think there is anything wrong with a three-year-old child who throws a tantrum and cries? Our stock investors are three-year-old children. They are ignorant and cannot listen to reason. There is no point in getting angry with them."

The old colleague had been tired of being scolded by stock investors after working for so many years and didn't take it seriously. The girl was very comforted. She wiped away her tears, thanked him softly, and continued to deal with the landline phone that rang again at her workstation.

"Oh, that's right. Keep your attitude and don't be affected. Order some milk tea and I'll reimburse you." He Yu turned around and went back to his office with his hands behind his back with relief.

The girl is a recent intern who has just joined the company. Her family background is not special. She has a master's degree from a British naval school.

Her mediocre abilities did not stand out among the many job applications, but she loved to laugh and was full of youthful energy. When He Yu saw her during the final interview, he inexplicably felt that it would be great if he had a daughter like her.

So this young girl defeated several strong competitors and got the job smoothly. She didn't care about occasional small mistakes in the office and worked happily all day, which caused complaints from her old colleagues who helped her take responsibility for the work mistakes.

He Yuquan pretended not to see it, and just regarded it as a way to commemorate his youth as he was getting older, and to bear the pain of other employees paying for the cost of his commemoration of his youth...

"Why are your stocks falling? I'm asking you why your stocks are falling. I'm telling you, if they don't go back up, I'm going to sue you for fraud! Otherwise, give me my money back. Fuck you, I'm not playing with you anymore. I want to close my account!"

He Yu simply sorted out his work for the day, then remembered about the milk tea and got up and went to the public office area to ask the little girl why she hadn't bought it yet, but he saw her crying again while holding the landline phone.

There was constant cursing coming from the microphone, and the other old colleagues were busy with their own work. The atmosphere was depressing and no one came to help.

Seeing that it was not appropriate to comfort her anymore, He Yu felt bad and decided to turn a blind eye to it. He picked up his suit jacket and car keys and left the company.

Anyway, Mr. Xie is getting married abroad these days, and the senior executives in the company are not eligible to attend, so they all go to various drinking parties organized by the group headquarters to join in the fun. It’s no big deal for him to be lazy.

Furthermore, maintaining securities firms and supervising various relationships requires frequent travel. This month's business reimbursement quota has not been used up yet, so I made an appointment to have a cup of tea with a familiar executive from the buyer side of the city's municipal investment company to make a surprise purchase to keep in touch with him.

"Old He, your stock price has dropped by about 30% in the past few days, right?"

There was an incense burner in the tea room, with the aroma of agarwood lingering in the air. The tea artist, with a curvy figure and a cheongsam slit to the thigh, moved gracefully. Behind a screen, another tea artist played the guzheng soothingly.

The deputy general manager from Jingyue City Investment had bloodshot eyes and forced himself to suppress his anxiety and started a conversation.

He Yu admitted calmly: "27%, this round of market technical correction has gone down a bit, and it may take some time to consolidate."

What this means is that the market is falling, and it has already hit bottom and will rebound soon. Don't worry, our company is in good operating condition and will not let investors lose money.

The deputy general manager of the municipal investment company was stuck in his throat. He hesitated for a few times and reorganized his words to say tactfully: "The stock prices of more than 30 listed companies in our province have fallen by about % this round. If they fall further, they will reach the forced liquidation line of equity pledges."

"The change from positive to negative for equity pledge is due to market sentiment. From the perspective of our company's management, we pay close attention to investors' interpretation of the company's operating decisions and will provide positive feedback if necessary." He Yu's words were steady and rigorous.

Yunshan Group's motivation for spinning off Wogu Agricultural Machinery and listing it is to raise funds from the secondary market to provide financial support for the parent company's strategic expansion, so the equity pledge ratio is as high as 60%.

Using shares as collateral to obtain loans from banks and private equity funds to obtain cash flow was interpreted as a positive by the market when stock prices soared in the past six months.

The courage to take out leveraged loans to expand operations shows that the company is very confident about its future financial prospects!
Now the stock price plunge has instantly turned into a death warrant. If the stock price falls below the price at the time of pledge, creditors such as banks and private equity funds will naturally demand repayment.

If the company cannot repay the money, the creditors will either immediately sell the pledged stocks to try to recover the principal, or convert the shares used as collateral into shareholding assets.

Of the two methods, the former will force the company to sell off a large number of shares in a falling market, causing the stock price to fall further; the latter is equivalent to directly changing the company's name to that of the creditors, which will inevitably affect the company's operations.

In short, as long as the stock price continues to fall, once it falls below the pledge price and Wogu Agricultural Machinery cannot come up with the money to repay its debts, it will undoubtedly die.

He Yu was very clear about this, but on the one hand, the stock market was about to stabilize, and on the other hand, the cash flow obtained through equity pledge had already been laundered into the group's parent company's finances in eight hundred ways, leaving no money at all to prevent debt repayment risks.

However, the parent company of the group will not just take the profit without taking anything else. The most important thing is that Yunshan itself has the support of Xiyou Taihe’s capital, so it should be relatively easy to repay the 70 to 80 billion equity pledge debt.

If the sky falls, there will always be someone taller to hold it up. Mr. Xie has not yet responded to the drop in stock price. He Yu really couldn't promise or guarantee anything, so he could only say some bland words.

"Old He, let's not be polite. Yunshan is the pillar of private enterprises in our province. You have to give me some peace of mind." Seeing that he could not get any results by questioning him, the deputy general manager of the Urban Investment Group changed his strategy and pressed his aching temple to play the victim.

He Yu couldn't help but ask, "What's the matter? Are you worried?"

"Oh, how many of you are worry-free?"

The deputy general manager of the Urban Investment Corporation burst into laughter, tapping the tea table with his fingers, making a soft sound. The tea artist, who had been brewing rich and sweet tea for two years, was very knowledgeable and tactful, and left the tea room gracefully with the new tea that he had brewed while playing the guzheng.

He Yuliao yawned out of boredom. After all, he was no longer at the age where he wanted to squeeze into any seam he saw. The slit of the cheongsam was too high for him to appreciate. A proper cheongsam was dignified and beautiful, which showed more dignified charm.

"Your company has a high pledge ratio, but you have Yunshan to back it up. Even if things get bad, you still have the support of the young master. This is stable happiness."

After closing the door, the deputy general manager of the municipal investment company tugged at his collar and complained without restraint: "But among the more than 30 listed companies in the province, every one of them has a high proportion of equity pledged. They have no ability but are courting death."

“Don’t even think about how the stock market will fall further. Even if it seems to be stabilizing now, there are still shares that are pledged and will be liquidated. Last night, they begged for help and forced us to hold an all-night meeting to discuss a rescue plan.”

He curled his lips in a vulgar way: "Fuck, the shit is blocking the ditch and I want to ask for help. Where can I help it to generate cash flow?!"

He Yu only needs to consider the survival of his own company, and he has to consider the overall situation from the perspective of the deputy general manager of the Municipal Investment Corporation.

Based on the spirit of supporting the development of local listed companies, state-owned enterprises, urban investment companies, banks and other units at the provincial and municipal levels in Jilin are the main buyers of listed companies in the province.

Taking Jingyue City Urban Investment Company as an example, for a listed company with a strong background like Wogu Agricultural Machinery, it not only holds debt rights through equity pledge for loan financing, but also holds a considerable number of stocks.

The stock price plummeted and they suffered losses on both ends, while more than half of the province's more than 30 listed companies were on the verge of bankruptcy. It had nothing to do with whether they were willing to take the initiative to rescue them.

They should consider where to get large cash flow to save themselves. When they can't even save themselves, the entire province's economy will collapse.

The decline in stock prices broke through the equity pledge, listed companies defaulted and their cash flow was drained by loans and they died suddenly, urban investment companies, banks and other financial institutions, which were creditors, suffered huge losses and investors fled in panic, and financial institutions followed suit and their cash flow was drained and they died suddenly.

Financial institutions collapsed, hundreds of billions of funds evaporated from the financial market, and the entire province's economic and financial system was drained of cash flow.

Such smooth logic has been established in more than 2,000 listed companies in all provinces and cities across the country. Today, in the stock market, thousands of individual stocks have a high proportion of equity pledged.

So back to the beginning...

The deputy general manager of the municipal investment company had complained enough and changed the subject: "If the stock price continues to fall, can you suspend trading?"

"Brother, if we just suspend trading and stop investors from buying and selling, the stock price won't fall without transactions... This is just hooliganism. How could the exchange agree to suspend our trading?"

He Yu sipped his tea and said in protest, "Besides, we can't suspend trading now because we are stuck in the time frame of announcing the semi-annual financial report."

This year, Wogu Agricultural Machinery is operating well and has good financial performance. He was counting on the stock price to continue to rise and get a year-end bonus. Why suspend trading?
"If the regulatory authorities do not allow the suspension of trading, then we have to stabilize the market. In any case, the market cannot fall any further. If it falls further, it will be a stock market crash and an economic crisis." The deputy general manager of the municipal investment company was worried.

He Yu sighed: "Oh, can you relax a little? If I knew you were so anxious today, I might as well answer the phone calls from shareholders at the company."

"Wogu is a child of his mother. You sit here and talk without any pain in your back, but you didn't know that we are under more pressure than the sky."

The deputy general manager of the municipal investment company held the chat in his hands, pointed at the ceiling and lowered his voice in an ambiguous tone: "Old He, has your young master given any instructions?"

"Mr. Xie is busy getting married, and our little matter..."

He Yu seemed to be nonchalant, but halfway through his words his cell phone suddenly rang, followed by the deputy general manager of the municipal investment company's cell phone rang.

Amid the shrill music, the two people picked up the phone at the same time.

"It's over. The market has plummeted."

The deputy general manager of the municipal investment company hung up the phone and squeezed out a few words from between his teeth. He Yu's palms felt cold. Wogu's intraday limit down touched the warning line for equity pledge liquidation. The creditor notified to increase the collateral to avoid forced liquidation.

When I left the company in the morning, the market was still fluctuating sideways underwater. How come it suddenly started to plummet?

"I go first!"

He left a message and hurried back to the company. The deputy general manager of the municipal investment company took out two antihypertensive pills from his pocket, put them into his mouth, chewed them dry, and swallowed them with tea.

After half an hour of recovery, I found that my phone showed that I had been added to a WeChat group, where provincial leaders, various state-owned enterprises, and board secretaries of listed companies in the province with equity pledge risks were listed.

——Urgently establish a financial stability maintenance team.

The Shanghai Stock Exchange main board closed down 7.4% that day, and nearly stocks hit the limit down. All those who were slow to react finally realized that the rebound was an illusion and disaster had struck.

"Didn't Mr. Xie give any instructions?"

Late at night, before the stability maintenance team meeting began, He Yu met the deputy general manager of the Urban Investment Corporation in the corridor. Only half a day later, when faced with the repeated questions, his face no longer had any mysterious look, only a pale face.

(End of this chapter)