Chapter 31: Short-Selling the Longhui Group

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Huang Zhenhua found it hard to believe. Sun Changying had already suffered losses once because of the conflict between his son and Yang Chen—how could he be so forgetful?

“Does Sun Changying really have that much nerve? Doesn’t he know how important you are now?” Huang Zhenhua asked.

Yang Chen smiled and said, “He thinks I’m just a scapegoat, with no backing or capability. The investment-to-debt agreement between Sihai Group and Changhui Group states that if Sihai Group goes bankrupt and is liquidated, the entire project will be handed over to Changhui Group as debt repayment. So he said he’s different from the other creditors. The others don’t have such an agreement and must ensure I survive in order to keep hope of recovering their debts. But he should try every means to finish me off and push Sihai Group into bankruptcy liquidation. That way, they can use a 30 billion investment to acquire a project costing over 60 billion. The night before last, he even sent Zhang Lei, president of the Auto Trade Company, with a group to corner me. Luckily, I’ve trained in martial arts and wasn’t caught off guard. You see, he’s already pushed me to this point. If I don’t strike back hard, am I still a man?”

Huang Zhenhua said, “I understand… Don’t act rashly. I’ll personally talk to Sun Changying. If things don’t go well, I’ll handle it as you said. I have to go now, things are a mess here and need my attention.”

Yang Chen gave a brief acknowledgment and then hung up.

“Alright! Everyone can leave for the day. We’ll work overtime at nine tonight,” Yang Chen said.

Yang Chen left with six others, and the investment department staff bowed together to see them off.

Once Yang Chen and his group had gone, the traders began packing up and discussing among themselves.

“Working here every day is fantastic. I hope Chairman Yang stays on as chairman of Sihai Group.”

“With his method of guaranteed profit, even a 3 trillion debt isn’t a big deal. One day, it will all be paid off.”

“That old bastard Wang Sihai isn’t completely useless. At least he gave Sihai Group hope. If the company stayed under his control, bankruptcy was inevitable. Now with Chairman Yang, everything looks promising.”

“Working for a boss like this gives us hope. Working for a sly merchant like Wang Sihai only means doom.”

...

Yang Chen arrived at the office of Zhang Jinsong, the vice president in charge of real estate. Zhang quickly stood to greet him.

“Chairman Yang, you’re here. Please, have a seat.”

Yang Chen sat in Zhang Jinsong’s chair and smiled, “Coordinate with the city government. They want to hand over Yuangang Village and the surrounding vacant land to us for development. We don’t have to pay for now; we’ll pay after the project sells and recovers funds. This project has to be big. Everyone should know Sihai Group is launching a new project, to restore some confidence to those who bought Sihai Group’s unfinished buildings.”

Zhang Jinsong’s face lit up with joy. “Really? That’s such great news. It has to be you, Chairman Yang. Only your ability can assure everyone. Otherwise, they wouldn’t allow such a loss-making arrangement. I understand your intent. I’ll make sure it’s done right.”

“Good. Go handle the coordination first. Once settled, we’ll plan the development properly. Remember to ask for schools, hospitals, whatever is needed. Don’t be afraid if they refuse. The only fear is not asking for enough,” Yang Chen instructed.

Zhang Jinsong laughed heartily, “Understood! Everyone’s counting on you to solve problems. We’ll take the initiative. Whatever we can get, we must get. Even what we can’t, we’ll try.”

Yang Chen smiled, stood up, and left. Zhang Jinsong saw him to the door and hurried back to prepare for the meeting with the city government on the Yuangang Village project.

Shortly after the stock market closed at three in the afternoon, an investment advisor named Lin Qiu from Guojun Securities posted news on his personal social media account.

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“Breaking news! The reason Changhui Group’s stock hit the daily limit downside is that a mysterious fund is short-selling Changhui’s stock at all costs, reportedly involving as many as 1.6 billion shares. Some institutions received the news and recklessly offloaded their shares. It seems there’s a big player trying to kill Changhui Group. If you’re a retail investor inside, get out quickly. It may be too late, and delisting is possible.”

This news quickly shot to the top of the trending lists on major securities and financial platforms, sparking heated discussions among Changhui Group shareholders and curious onlookers.

“Rumor has it, but no confirmation. Supposedly, Sihai Group is shorting Changhui Group’s stock, though the exact reason isn’t clear. Here’s another piece of news: Sihai Group also bet on the restructuring plans for Longguo New Coal and Shenhua Coal. Their new chairman is very sharp, highly perceptive, and operates decisively.”

“It’s said that Changhui’s chairman ordered the president of Changhui Auto Trade Company to lead people to beat up Sihai Group’s new chairman, but he got counterattacked by one person. After that, Sihai Group started shorting Changhui. Looks like this feud won’t end easily.”

“When gods fight, the fish in the pond suffer. What did we shareholders do to deserve such losses?”

...

Watching the public opinion spiral out of control, Sun Changying hurriedly ordered the company secretary to issue a statement to “clarify.”

First, Sun Changying did not order the president of Auto Trade Company to lead people to assault Sihai Group’s new chairman.

Second, Changhui Group’s operations remain normal. Today’s stock price fluctuations are merely technical adjustments; there is no large-scale short selling.

Third, Changhui Group reserves the right to pursue legal action against rumor-mongers.

Shortly after this statement was released, various departments in Jiangcheng City issued announcements on official accounts on Weibo and Douyin.

Jiangcheng Market Supervision Bureau: We have received multiple consumer complaints alleging that Changhui Auto Trade Company’s Jiangcheng branch sells refurbished new cars and that sales staff have been rude, insulting, and threatening customers. We have officially launched an investigation into Changhui Auto Trade Company and will report developments in due course.

Jiangcheng Tax Bureau: We have received reports of shadow contracts and tax evasion by Changhui Auto Trade Company’s Jiangcheng branch. We have formally initiated an investigation and will announce results in due course.

Jiangcheng Police Bureau: We have received reports of Changhui Auto Trade sales staff verbally abusing and assaulting car owners. Relevant suspects have been detained, and investigation results will be announced in due course.

These announcements weren’t a death sentence for Changhui Group but signaled a crackdown in Jiangcheng. As long as institutions and retail investors panic, Changhui’s stock price cannot be sustained.

The next day at market open, Changhui Group’s stock price plummeted as expected. Institutions initially tried to prop up the price, but panic selling by retail investors led to a stampede. Seeing this, institutions gave up and dumped large orders, pushing the stock to the daily limit down, leaving no escape for retail investors.

Anyone who trades stocks knows that once panic sets in, the market votes with its feet, anticipating further declines. More and more shareholders sell, often causing consecutive days of daily limit drops.

For the remaining three trading days of the week, Changhui Group’s shares hit the daily limit down, closing at 1.53 yuan.

To rescue the stock price, Sun Changying quickly teamed up with several shareholders and executives to announce a share purchase plan, pledging to buy shares worth no less than 100 million yuan over the next six months.

Normally, such announcements can rescue a stock price as long as the company hasn’t committed any definite illegal acts warranting delisting.

But since Yang Chen had chosen to act decisively, he would not allow Changhui Group any chance to struggle.

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That evening, Yang Chen invited several bank presidents out to dinner.

“Gentlemen, the feud between me and Changhui Group is clear. It’s time for you to pick sides. Sun Changying openly said he wants to destroy me. Think carefully about whom you support,” Yang Chen said bluntly.

Li Jun from Industrial Bank immediately replied, “Is there even a question? We must support Chairman Yang.”

Chen Tao from Commercial Bank quickly followed, “Tomorrow we’ll report to headquarters and urge them to collect debts from Changhui Group. If they can’t repay, we’ll recommend headquarters apply for Changhui Group’s bankruptcy liquidation in court.”

Zhang Qiuming from Construction Bank said, “We definitely stand with Chairman Yang. Even if it’s Sun Changying’s fault or even Chairman Yang’s, we will stand firmly with Chairman Yang.”

Yang Chen smiled and raised his glass, “Gentlemen, that’s generous of you. No need for words; everything is in this glass. Cheers!”

To give these bank presidents reason to request reinforcements from headquarters, Yang Chen ordered Chen Chao to sell a stock after the White Eagle family’s stock market opened and converted the 1.1 billion yuan loan plus 100 million Eagle Coins borrowed from five banks into Eagle Coins at the current exchange rate and repaid the foreign currency accounts of the five banks.

The White Eagle family stock has no price limits and operates on a T+0 system. Over several trading days, Yang Chen turned the 100 million Eagle Coins principal into 600 million Eagle Coins. After repaying the total of 250 million Eagle Coins borrowed from the five banks, Sihai Investment’s account still had 350 million Eagle Coins in assets—pure profit from Yang Chen’s operations.

After receiving Yang Chen’s repayment, the five bank presidents confidently contacted their headquarters to report and requested support for Yang Chen, not allowing these chaotic matters to disrupt his strategic plans.

On Sunday night, the five major banks took action.

The president of the Construction Bank’s Northern Frontier branch deliberately posted a message on his social media circle.

“This afternoon, we received orders from headquarters: tomorrow we will collect debts from Changhui Group. If Changhui doesn’t repay within three days, we will apply for their bankruptcy liquidation in court. Friends with business dealings with Changhui Group, make arrangements quickly, or you risk total loss.”

Soon after, presidents of other banks’ Northern Frontier branches, including Agricultural Bank and Commercial Bank, posted the same message.

After posting, they shut off their phones, leaving no chance for anyone to inquire further. The more impossible it was to get news, the more unsettled people became. Companies and individuals cooperating with Changhui Group couldn’t stand it and contacted Changhui overnight to settle accounts or cancel cooperation.

Sun Changying’s phone was bombarded with calls. Shareholders blamed him for rash, reckless actions that caused heavy losses to everyone. He had to take full responsibility.

Furious, Sun Changying called Yang Chen.

“Yang Chen, you’re ruthless! You’re really pushing us to the brink!” Sun Changying shouted.

Yang Chen cursed outright, “What nonsense are you spouting? Since I decided to act, I won’t leave you any chance. You and your father wanted to kill me? Let’s see who dies in the end!”