Chapter 1348 - I am willing to help
Chapter 1348 – I am willing to help
The representatives finally understood the cause of this incident. It is because they had slowly become the controlling shareholders of their joint venture with the local firms. Some even became the overall owners, and China wants to recover those firms now.
Although these foreign companies had paid for those shares, they can buy them because of their control over the shareholders. This might seem like a normal business transaction, but they had not kept their promises.
Now, China is getting back at them for not keeping to their words. This is karma.
The representatives knew how to carry on with the negotiations after finding out what China wants. But this must be decided by their head offices, and they cannot make the decisions.
As Wilson is pressing and threatening those representatives, the other lawyers attack these companies on international media. These companies had no choice but to start negotiations with Chief Jia again.
The representatives still one big worry. They are unsure if Chief Jia will keep to his words. What if Tai Hua Supermarket Group and other companies sue them after they agree with Chief Jia?
Some smaller companies might also sue them, and they will face endless lawsuits.
Wilson told the representatives that most Chinese companies would not sue state-owned companies. All problems will be solved if the Chinese State Assets have a controlling stake in their companies.
Those companies have high assets and exaggerate when they say they will be bankrupt if the compensation is 200 million USD. But 200 million USD will break their cash flow chain.
These companies thought of an idea. They can use the companies’ assets as collateral to get loans for the compensations. You all want are after this company’s shares, right? Sure. Get ready to take over a company with negative assets.
I shall see if your Chinese Government can afford to fill this gap. Even if the Chinese Government can pay the company’s debts, they will still have the controlling shares. All the representatives believe the Chinese Government will not try this again. It will affect their reputation and scare other investors away.
The representatives also want Tai Hua Supermarket Group and those internet companies to sign an agreement with them not to sue them.
“Station Chief Jia, this is not an issue. I can agree and is willing to help you.”
Chief Jia told Feng Yu what happened, and he agreed because he did not want to sue them. Like what Wilson said. Most companies will not sue state-owned enterprises.
Chief Jia is worried that Feng Yu will get someone to sue those companies again and further blow up this matter.
Chief Jia smiles after Feng Yu agrees. He will get credit for this incident and might get a promotion. The higher-ups will also note his contributions and have no problem getting one more promotion before his retirement.
Both parties want to end this incident fast, and the negotiation went smoothly. John and other representatives were assured after getting Feng Yu’s promise.
Feng Yu will not go back on his words, and the representatives felt his assurance carries more weight than Chief Jia.
But the representatives told Chief Jia that the companies’ shares must be bought with cash. They will not accept share exchange, and the buyout price must be reasonable. The Chinese Government cannot suppress the share prices.
Chief Jia and the representative from State Assets agreed. This State Assets representative had come to negotiate the shares buyback with them.
Of course, the State Assets will not be buying all the companies’ shares. They must give some to the Local Government. But their total shares must be over 50% and have more representatives on the board of directors.
Those foreign companies can continue to manage the operations as they are better at corporate management. But the Chinese Government will have the overall control of the company. This is to prevent these foreign companies from creating trouble again.
One of the companies, which is also the weakest companies, was used as an example in the media. They have to pay 100 million USD, and the other companies’ compensations are less than 50 million USD. The total compensation is less than 500 million USD. Still, it set the highest compensation from a single lawsuit record in China.
Wilson and the other lawyers felt this amount is too low compared to CCTV’s high viewership. But they know this is Feng Yu’s instruction. He has signed some cooperation agreements with those law firms, and all of them are satisfied.
Furthermore, the lawyers are paid more than 200 million USD. From their understanding, compensations in China are very low. There are no compensations more than 10 million RMB, let alone over 100 million USD. They had created history.
This case also let them have an opportunity to enter the Chinese market. The trading companies will be interested in working with them.
This lawsuit ended quickly, and both parties chose for private settlement. At the same time, these companies signed the shares purchase agreement with the State Assets.
After the State Assets signed the agreement with those companies with the funds they get from CCTV, they realized something was off.
First, those companies’ products are not selling in the past month, and their production stopped. The companies also owe their workers a one-month salary.
Secondly, these companies do not have money in their accounts and cannot restart production. They cannot even afford the raw ingredients. They also found another problem. These companies are heavily in debt, and the State Assets had spent money to buy a burden.
When the State Assets’ representative questioned those companies’ representatives, they gave all sorts of excuses. They claimed they cannot afford the compensations and must get loans. They had also paid their workers and wired the profits to their head companies with their liquid assets.
These companies do not have money to restart production, and all of them should pump in the money based on the share’s proportions. The companies cannot repay their debts in their current situation and try to raise money now.
The State Assets’ representative had underestimated these foreign companies. He was ecstatic to purchase those shares but forgotten to check the accounts. The other party had played dirty tricks in their contracts again.
The Chinese Government cannot freeze those companies’ accounts during the lawsuit as it will escalate the conflict further. Nevertheless, the Chinese Government had gotten the shares they wanted, and the companies are not empty shells. The brand, skills, and workers are still around.
The State Assets do not have money to increase investment into those companies. They had used the money given to them by CCTV and their money to buy those shares, and the most frustrating part is those lawyers are paid half of the compensation. Why are they paid so much?
Feng Yu heard Wu Zhigang’s report and nodded. “They are tricked by the contract again and allowed the other party to exploit the loopholes. But it’s fine. I am willing to help. Zhigang, contact XX State Assets and tell them we are willing to invest in those companies.”