Chapter 593 Anran Card Chain Bomb

Back to the topic, Yang Xing hid in the Star Chasing Garden, except for his behind-the-scenes guidance, and was really deaf. He was devoted to teasing his son and daughter. But after all, the world has changed after 9/11, and his life as a good man at home finally ended in early December due to several major events related to Zhongxing Group.

This month, the year-end conference and the World Congress are going to open. In addition, Yang Xing had promised to domestic and foreign investors that their $300 billion would double, and now the final battle to close the palace is about to begin. Because since October, the US Securities and Exchange Commission, the regulator of the US stock market, has received anonymous reports and began to secretly investigate Enron, who is the top 500 companies on the list of the US Fortune 500 companies, and the result was that a shocking scam was discovered. As soon as the news came out, Enron's stock price immediately fell to $0.26, and the company's market value fell from $80 billion at its peak to less than $200 million.

In the face of internal and external difficulties, on December 2, Enron officially applied for bankruptcy protection from the bankruptcy court. The assets listed on the bankruptcy list reached US$49.8 billion, making it the largest bankruptcy case in US history. This news undoubtedly made the already sluggish US economy even worse. The stock market, which had only improved a little after suffering a heavy blow of "911", began to dive again.

Yang Xing had a clear understanding of Enron's inside story last year. At that time, he also won many collaborators as an important trump card. Now of course he has to throw it out as a bombshell. At the beginning of this year, Yang Xing intended to conduct insider trading through offshore subsidiaries through some American investment institutions, falsify and increase profits in the company's accounting records, and the company's senior management took to the outside world to report performance and increase the stock price. He released all the dirty inside stories such as selling stocks when the company's stock price rose to a high point for profit.

At the same time, Yang Xing and his partners secretly built positions and shorted the Anron stock price. In order to fight the short selling trend in the stock market, Anron had to borrow money everywhere to block the holes, allowing Yang Xing and the others to make a fortune, and contributed a lot to the subsequent melee funds. Originally, Enron was ranked as the No. 1 company in the United States, there was still a way to break down the east wall and make up the west wall for the market rumors released by Yang Xing and the others. Unfortunately, the big ship Anron suddenly encountered the headwind of "911" and immediately capsized.

After 9/11, the US financial market suffered a heavy blow. Even without Yang Xing and others taking advantage of the situation, many American financial institutions immediately took measures such as tightening monetary policy and reducing credit to prevent their own companies from appearing in the declining economy. After all, cash is king in troubled times, and no one wants to invest in water. But in this way, Anran Company has been taking the method of using the company's own reputation to make up for the deficit and immediately exposed it.

On October 16, Enron was forced to publish its second quarter financial report for 2001, announcing that the company's losses totaled US$618 million. At the same time, it was revealed for the first time that the company's shareholders' assets shrank by US$1.2 billion due to improper operations of Chief Financial Officer Andrew Fasto and the Partnership Company. The news came out in an uproar. Everyone couldn't figure out how Enron, which was blown up by Wall Street in the past, could have made such a big loss hole. Wall Street Bank, which had lent money to Enron, was also in a state of panic. The stock market was suddenly in panic.

If we follow the historical process of our previous life, Enron Company will have a long time from the fermentation of the incident to the final collapse. Yang Xing, who wanted to take the opportunity to make a fortune, was not patient and had to push it himself. Moreover, the melee of the US financial market after 9/11 was not over yet, and the US financial regulatory authorities also intercepted Yang Xing and his plan of making profits. Of course, Yang Xing had to add more fire to the US financial market, so that investors would turn into ants on the hot pan because of panic, and they were eager to withdraw their investment from the United States, so that they could take advantage of the troubled waters!

With memories of past lives and a large group of financial experienced subordinates helping, Yang Xing quickly found more flaws in the Enron incident. Although the US corporate laws are known as the most perfect in the world, they have always been a model for the United States to teach other countries a lesson, such as internal self-monitoring, external hiring of dedicated personnel to supervise, etc., it seems that the card is set up layer by layer, which is almost impeccable.

But no matter how good the system is, it needs to be implemented. There are always crooked monks who blow trumpets for the sake of profit. They can do whatever they want to make a profit and bypass regulatory laws without any scruples. Therefore, various corporate illegal acts exposed by the United States every year are emerging one after another, and are common. After this Anron incident broke out, it was like a chain bomb, and it was not the only one that exploded.

The first one to be hit by the Enron chain bomb was Anderson Accounting Firm, which audited it. In the United States, listed companies like Enron must hire external auditors to audit each financial report according to regulations. Enron hired Anderson, one of the most famous five accounting firms in the world, and the other five accounting firms are PricewaterhouseCoopers, KPMG, Ernst & Young and Deloitte, all of which are American companies. Just after Enron released its quarterly reports and revealed the dark side of Enron's financial situation, another letter of anonymous report on Anderson was placed on the desks of the U.S. Securities and Exchange Commission and the Department of Justice.

The letter disclosed that Enron Company hired Andersen to conduct audits for him at the beginning of its establishment in 1985. Half of Enron's directors had direct or indirect contact with Andersen, and even the chief accountant and financial director were from Andersen. Half a month after the outbreak of the Enron case, Andersen actually secretly destroyed thousands of pages of documents related to Enron Company. There must be something tricky here!

The U.S. Department of Justice, who received the report, did not dare to neglect it. While conducting a thorough investigation of Enron, it also monitored Anderson Accounting Firm. Facts proved that this letter of complaint was by no means a false accusation. On November 8, Enron was forced to admit to making false accounts. Since 1997, it has falsely reported profits of nearly $600 million. During this period, Anderson's firm provided financial guidance, and agents infiltrated Anderson's Department of Justice also discovered that Anderson did not stop destroying Enron's documents until Anderson received a subpoena from the U.S. Securities and Exchange Commission.

The facts were all right. The US Department of Justice immediately acted quickly and issued a search warrant against Anderson the next day and filed a criminal lawsuit, on the grounds that the company destroyed relevant documents and computer records after the Enron scandal, suspected of destroying evidence related to the Enron financial scandal, thus setting a precedent for the first large accounting firm to be criminally investigated in US history.

Anderson, a accounting firm with a history of 90 years and a business all over the world, has participated in financial fraud. This is tantamount to the tall image of a company that looks perfect and safe in the minds of many investors. Many investors are heartbroken and questioned loudly, "How many companies like Enron and Anderson are committing fraud? Who is the next one?"

Obviously, the aftermath of the Enron chain bomb has not yet been resolved, and another American company fell in the eyes of public doubts, that is Global Telecom. It is a company that provides fiber optic cables for many American communications companies. Its main business is to lay intercontinental optical cables on the seabed. At the peak of the network economy, one-fifth of the optical cables connecting the United States and the outside world are submarine optical fiber networks under the control of Global Telecom.

However, the high cost of laying undersea fiber and the bursting of the Internet economy bubble caused Global Telecom's crazy expansion plan to suffer heavy blows. The company's president Winnik did not consider strategies such as cutting costs and shrinking the front line, but also turned the company's idea of ​​false reporting of revenue and fraud in accounting. It also acquiesced to the company's senior management secretly sell shares in exchange for continuing to maintain a luxurious and luxurious life. By the end of 2000, the company had no money to make ends meet and had to discuss the company's sale with Hutchison Telecom and Stardust Communications, a subsidiary of Hong Kong Li Ka-shing, and Stardust Communications.

Originally, the acquisition case was suppressed by the US government because it involved submarine cables and was related to the national security of the United States. As a result, Stardust Communications and Hutchison Telecom suddenly exposed the fraud of Global Telecom's accounts, which prompted public opinion, which was already stimulated by Enron and Andersen, to quickly focus on Global Telecom.

As a result, many dark stories about Global Telecom were revealed. The media revealed that Global Telecom President Winnick lived a luxurious life, owned a $60 million mansion and a private jet worth 12.5 million. His office building was nicknamed the "White House" because its appearance was similar to the real White House. However, Winnick's "White House" used all Danish luxury lighting, which even the real White House was inferior to the real White House. Even his maid became a millionaire because of his holdings of Global Telecom shares. Forbes magazine once listed it as the cover character, saying that his wealth "accumulated at the speed of light."

The core management of Global Telecom is also extremely extravagant. When the company suffered serious losses, the company's management did not want to save the company, but instead used large expenses for its own enjoyment. Global Telecom's four consecutive CEOs withdrew at least $23 million from the company in the name of personal loans. From 1998 to May 2001, Winnick sold nearly $420 million in Global Telecom shares, and other senior executives of the company also sold nearly $900 million in shares. The combined two reached $1.3 billion, which was comparable to the shares sold by senior executives of Enron at the same time.

In November 2001, Global Telecom disclosed a loss of US$3.35 billion, six times the loss in the same period in 2000. This news shocked and angry many investors. Global Telecom's stock price fell less than 2 cents from the highest point of US$60 per share. Some investors angrily analyzed, "If you bought Global Telecom's stock in 1998, you have already lost 98% of all your property."

Previously, the senior executives of Global Telecom sold out all their stocks, which made other investors feel uncomfortable. With the excitement of the crowd, the Securities Commission and FBI were not allowed to intervene in investigating the senior executives of Global Telecom. The US Congress, which was originally shocked by the Enron and Andersen incidents, also paid special attention to this series of corporate financial fraud incidents, and demanded a thorough investigation of the financial status of large companies in the entire stock market.

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Chapter completed!