Extraordinary Genius

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It was not Zhang Ruiqiang who had looked for Li Mingde. IfZhang Ruiqiang wanted Bing City Machinery Company to be listed, he would notlook for Li Mingde. This was because he knew who makes the decisions at thiscompany. It was Feng Yu.

The one who had looked for Li Mingde was Bing CityGovernment Secretary. He needed credits for his promotion. He knew Feng Yu wasthe main shareholder of the Machinery Company and was the overall in charge.

But when the Secretary called Feng Yu, he knew that Feng Yuwas unwilling to get this company listed. So, he looked for Li Mingde, hopingthat Li Mingde could persuade Feng Yu. He knew Feng Yu trusted Li Mingde a lot.If not, Feng Yu would also not ask Li Mingde to retire early from thegovernment service and rehired him into the company. Li Mingde was even givenshares of the company.

The Secretary also felt that Zhang Ruiqiang would not stopthis as the whole Bing City Government will get the credit if this company waslisted. If the Secretary got promoted, Zhang Ruiqiang would be able to takeover his position. Zhang Ruiqiang had performed well in the past two years andwill have high hopes of taking over his position. Moreover, he also had supportfrom the Provincial Government no. 1.

There were also rumors that the Provincial Government No. 1will be retiring to the backend at the end of the year. At that time, ZhangRuiqiang will lose his strongest backing in the Provincial Government. ZhangRuiqiang will not want to be Bing City Government’s Party Secretary? Ingovernment service, one wrong step will mean failure.

Li Mingde dare not to offend the Party Secretary, and hecould only ask Feng Yu for help.

Tsk. Feng Yu knew that getting listed was the norm for manycompanies to raise funds. It was better than getting loans from banks and couldincrease the company’s value effectively.

But Feng Yu does not want to get listed. This was becauseonce the company was listed, his shares in Bing City Machinery Company would bediluted. For the company to be listed, at least 25% of the total shares had tobe offered to the public. Then, Feng Yu and his father would be less than 50%.

Of course, after the company was listed, the share priceswill rise, and the shares will be more valuable. But that’s only for people whowanted to sell their shares. Feng Yu had no intention of selling his shares.

In Feng Yu’s previous life, many big companies wanted to belisted was not because they want to raise funds. It was because they wereinvested by venture capital. How does a venture capitalist make money? Theydepend on selling the shares of the company after they got listed.

The share prices of some good performing companies orcompanies favored by investors will rise after they got listed. The Venturecapitalist could sell off their shares during that period. Sometimes, theymight get more than 20 times the returns.

Also, Venture capital normally owns preferred stocks. Theydo not have voting rights but will get dividends. Also, they get priority inselling their shares.

Some companies got listed was to lower their debt ratio.Many companies had lots of debts, but could still get listed. Once listed, theywould be able to repay their debts.

Of course, there was also a great benefit for getting listednow. There were not a lot of listed companies on the stock exchange now. If thecompany were listed, it would be able to increase its brand awareness andimage. But Bing City Machinery Company does not need this. Since Bing CityMachinery Company launched its motorcycles, the company had become the leadingbrand throughout China. All their products were selling like hotcakes.

Many companies that were doing well, especially thosecompanies that were owned by an individual, will choose not to be listed. Forinstance, Shun Feng Logistics. In Feng Yu’s previous life, many people hadtried to get this company listed. They told the owner that he could make muchmore if the company were listed. But the owner refused as he does not lackmoney.

Another disadvantage of getting listed was the finances hadto be disclosed to the public. This was not because Bing City Machinery Companyhave any debts or fake accounting. It was because Feng Yu does not want hisname to appear in the reports.

Although Feng Yu could not hide his wealth completely, hestill prefers to keep a low profile and make money silently.

Feng Yu had wanted to set up a holding company in Hong Kongand then transfer all his shares in the various companies to this Hong Kongholding company. But it was too troublesome. Feng Yu must cough out a largeamount to do this.

Current, Hong Kong was still not considered part of China.If Feng Yu were to do this, people would think that he is transferring hisa.s.sets overseas. Feng Yu had also asked Master Lu for help, but Master Lu couldnot do anything about this unless Feng Yu sold off all his shares at the marketprice. If not, the Central Government will step in and stop the transactions.

If this were after 1997, the return of Hong Kong, it wouldbe easier for Feng Yu to set up a holding company in Hong Kong.

Feng Yu thought about this and decided to wait. Also, thiswas not the right time to get his companies listed. Especially in the Chinesestock exchange. The stock market of China had just started T+1. This was toprevent the manipulation of the stock market.

But this year, China’s stock market was unstable. China hadissued a lot of treasury bonds, and many security companies start to manipulatethe market. These two years, the market would be bearish, and investors do nothave confidence. If a company were to be listed now, the share prices mighteven fall.

Of course, if Feng Yu really wanted to manipulate themarket, no one would be his match. His technical knowledge and financialbackings were the top in China.

But Feng Yu does not want to do this. He does not want toget into trouble. Even if he could cover everything up, others might find outin the future and labeled him as a market manipulator. He will be guilty ofcheating all other investors of their hard-earned money.

After the company was listed, the management had to do a lotmore. Feng Yu felt that Li Mingde and the rest still do not have what it takesto manage a listed company. Although these people could accept new things,their speed and ability to accept new things were not fast enough.

Also, the cost of getting listed was very high. The companyneeds to hire people to audit the company, hire lawyers, etc. The audit of thecompany would be more stringent, and every tiny detail of the company had to beaudited. It would be more troublesome if Feng Yu were to transfer all hiscompanies shares to a holding company in Hong Kong.

There were pros and cons for a company to be listed. Feng Yuthought about it and felt this was not the time for him to get his companies tobe listed.

Feng Yu told Li Mingde to fend off those governmentofficials. He had given Li Mingde some shares of the company, and this was hisresponsibility. Feng Yu would never get his company listed for the governmentofficials to claim credits.

Especially…… Feng Yu does not know Bing City’s PartySecretary.

Feng Yu told Li Mingde to inform him if he really could notsettle this. He will go back to settle this problem.

Translator’snotes:

Preferredstock

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