Otaku Translation: Blackstone Code Chapter 137

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Once a listed company faces accusations of falsifying financial reports, its reputation could quickly plummet. Even if its stocks were revered as "golden stocks" in the stock market moments ago, the mere occurrence of such an event could instantly transform them into worthless "junk stocks," devoid of any value.

The entire market's understanding of the operational situation of a listed company mainly came from the financial reports released by the company in each reporting period.

These reports would contain detailed operational situations, and finally a precise conclusion: how much money they made, how much they lost, how many assets they had, how their operations were performing, and so on.

People outside the company, and even those within, may not necessarily have a comprehensive understanding of a company. Coupled with this being a society built on trust, people were willing to believe that these listed companies would not engage in the heinous act of manipulating data, so few would question the accuracy of a listed company's financial report.

In reality, they also lacked ways for questioning. Even if they found things suspicious, they would have no means or opportunity to unravel the mysteries in their minds.

But it must be said, for a listed company, falsifying financial reports was like teetering on the edge of an active volcano. Even if they didn’t plunge in, they'd inevitably get burned.

After Neo disclosed the falsification of the financial reports, the telephone receiver was suddenly inundated with a flurry of voices. He could sense the distress of the people on the other end of the phone line, but he remained unfazed. After all, he and his wife's father were no longer the primary shareholders of the company.

If there were to be a problem, the two of them as father and son-in-law wouldn't be able to escape. But neither would the other shareholders fare any better; they would also face the prospect of bankruptcy. This was precisely why Neo was confident that even if he revealed such information, these people wouldn't report him.

"Neo, Auburn, you're committing a crime!"

"I'm going to report you!"

Soon, the receiver erupted with the emotionally charged roar of Listoan Group's board's largest shareholder. It was evident from his voice that besides being hoarse, there was also a tremble.

Neo remained calm, replying with a joking tone, "Feel free to hang up now and report me for falsifying financial reports."

"I believe the Federal Financial Crimes Investigation Bureau, the Federal Tax Bureau, and the media would be very interested in your report."

The Federal Financial Crimes Investigation Bureau was a branch under the Federal Bureau of Investigation, operating independently to investigate and combat all financial crimes.

Neo's words unexpectedly silenced the largest shareholder. After about four or five seconds of silence, other members within the board began to console him. If this person with a bad temper were to really report Neo, they would all be in trouble.

After a brief persuasion, the largest shareholder made only one demand, "You must explain the purpose behind your actions. If you can't convince me, I will immediately report your illegal activities..."

Although this statement sounded fierce, it was essentially a threat with a way out. Neo certainly knew how to play along.

"Of course, that's precisely what I want to discuss with everyone, as it pertains to our future actions."

"In fact, starting from three years ago, Listoan's profits began to decline rapidly, and around two years ago, the company has experienced its first loss..."

Simply put, Neo noticed some issues with Listoan at that time. Cash flow had slowed down, inventory of goods had piled up, coupled with people having less money in hand, and consumption power started to decline, a conglomerate with hundreds of brands would inevitably face the same issues as smaller enterprises.

Neo, Auburn, and their trusted confidants believed this wasn't just a simple phenomenon. At their insistence, the finance department modified the financial reports for the Federal Tax Bureau, turning losses into sustained profits, and even showing growth.

The decision Neo made quickly yielded the desired results. Listoan Group's stock continued to rise in the market, and the rise in stock prices made the losses seem insignificant.

In his own words, in the annual summary report, the skyrocketing group company's overall market value driven by the increase in stock prices was enough to offset the losses in operations.

It was a poison pill. Under continuous operational losses, using rising stock prices to cover up poor management seemed like a good thing, but it was all built on false data.

Up until today, two years of financial fraud were enough to bring Listoan crashing down in an instant. Neo didn't even hide anything. In relatively cold-blooded words, he told all the shareholders, himself and his father-in-law Auburn had already cashed out nearly half of their shares.

In other words, the shares they currently held were not enough to maintain their positions.

Facing the shareholders' anger and curses, Neo and Auburn remained indifferent, even a bit smug.

Of course, there were many criminal activities involved. This was why Neo and Auburn still held the positions of CEO and the chairman of the board. They wanted to absolve themselves of guilt, and the best way to do that was to ensure their illegal actions weren't investigated.

"From the information I have now, Listoan is actually in a very dangerous situation. This is why I had to push Langdon so hard..."

Langdon was the name of the mayor of Sabin City.

Neo sat in his study chair, holding a high-quality, plain-colored Colofu in one hand and the phone in the other. His gaze seemed somewhat distant, as if the smoke rising from the Colofu cigarette had clouded his eyes, preventing him from seeing clearly, yet it was as if his gaze pierced through reality, into a void.

"Only by acquiring EverBright's most crucial resources can Listoan quickly transform and gain a lifeline."

"Originally, our secret negotiations with EverBright were halfway through, but a sudden investigation by the Federal Tax Bureau halted our plans. If we don't pressure Langdon, we won't get the chance to save ourselves from this quagmire. But as it stands, it seems we've failed."

The shareholders of EverBright had already planned to withdraw their funds and return to their homeland for post-war reconstruction. Those once valuable businesses and channels had now become their means of liquidation.

If not for the sudden intervention of the Federal Tax Bureau, Listoan might have already secured what they wanted.

Unfortunately, everything had been disrupted.

The phone line remained eerily quiet, with only heavy breathing audible. No one knew that Listoan's current situation had deteriorated to such an extent. It was worth noting that in the outside world, just the name of the conglomerate could make many people proud.

In this state, everyone took pride in being an employee of Listoan Group!

For such a company to be on the brink of bankruptcy, as Neo described, was truly hard to imagine.

But in fact, it wasn't entirely unexpected. When Listoan's sales began to slow down, it was destined for them to face a downturn.

With tens of thousands of workers, millions had to be paid out in wages every month, but their inflows and profits were slowing down too much.

On one hand, they had to lay off some employees to save costs, and on the other hand, they used financial fraud to inflate stock prices, then cashed out to obtain the necessary funds.

Much of the funds that Auburn and Neo cashed out were actually invested back into the company's operations. Of course, they did so under the guise of borrowing to the company through third-party names; they weren't that selfless.

The silence of the people satisfied Neo. Now that everyone was basically on the same page, he continued with his thoughts, "I've been in contact with some people from the Conservative Party. They are more agreeable than Langdon and also agree with my views and ideas on the current changes in the company. They are willing to try cooperating with us."

"They've offered very favorable policies. This is an opportunity, a chance to rid ourselves of burdens."

"We will shed those workers and employees who have been draining us of blood and leave with our wealth directly. This way, none of our previous actions will be called into question."

"More importantly, I ask that none of you do anything. When the market opens on Monday, rumors of serious discord between Langdon and me, as well as the governor's disdain for Listoan, will spread. When that happens, our stock price will plummet rapidly. I urge you to also sell off some shares to lower the stock price. After the government intervention, I will announce the initiation of privatization."

"And then... we can all leave here worry free, and I assure you that each of you will not see a drastic decrease in your net worth."

This was a plan Neo and Auburn had deliberated on for a long time. Their initial idea was to acquire the assets they had previously negotiated with EverBright, quickly integrate EverBright’s channels and advantageous industries, and reactivate the projects they held after the merger.

But given the current circumstances, if that was not feasible, then it was time to take a bold approach: to simply take the core of the company and leave this place, while also leaving some troubles behind locally.

In the future, when people spoke of Listoan, they wouldn't say that certain people had driven the company to the point of having to leave. They might even leverage Langdon's and the governor's dislike for them to add a political dimension to their departure.

As for financial fraud, those who knew wouldn't speak, and those who wanted to make trouble for them wouldn't know about it.

It was an impeccable plan. Even if these concerns were brought up later on, the repercussions would likely be minimal, perhaps just fines or other monetary penalties. They might even manage to avoid any real consequences, making them a textbook example of financial manipulation!

As long as the conglomerate and the shareholders didn't hold him accountable, he wouldn't even need to face punishment—after privatization, he would only be accountable to the shareholders, and as long as they didn't pursue his responsibility, he wouldn't be prosecuted.

Of course, that was all in the future. What they needed to do now was to weather the storm!

He felt that what the governor's aide had said was right: only through "unity" could they get through this difficult time. And that was exactly what he was doing now: uniting the board members to complete this rapid transformation together!

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