Yokohama Electron (13)

The first-ever corporate crisis of its kind in China sent shock waves through the entire world.

No one could quite believe what they were seeing.

Ever since the financial market came into being, companies had been stolen and seized with depressing regularity. Founders were pushed out of the very businesses they had built all the time.

But those kinds of takeovers were supposed to happen one way: by buying up shares with money, then winning control at shareholders’ meetings and board meetings.

What company in the world got taken over by force, with private security guards and hired thugs?

And yet that was exactly what had happened.

Even that chaos only lasted a few days.

As the former chief executive, Rupert Liu quickly stabilized the company, and the factories went right back to running normally.

Yokohama Electron’s headquarters, which held 49 percent of the shares, refused to recognize Rupert Liu’s position, and the Shanghai joint venture, which held the remaining 51 percent, ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠did the same.

In other words, 100 percent of the shareholders opposed his management, and even the Chinese government refused to acknowledge it.

So Rupert Liu was effectively occupying the company illegally.

Even so, he continued to run it as if nothing had happened, and the employees followed his orders.

Needless to say, a company like that couldn’t possibly do business normally in the global market.

Foreign semiconductor companies cut off all business with Yokohama Electron China and announced that they would deal directly with headquarters instead.

Rupert Liu didn’t care in the slightest.

China’s domestic market was enormous.

He still kept doing business with Chinese semiconductor companies such as CMIC, and that alone was enough to keep the company afloat.

The reason Yokohama Electron had been valuable came down to two things.

First, its technology was on a level no rival could match. Second, it was growing explosively in the Chinese market.

But with the Chinese subsidiary’s declaration of independence, all of that value vanished.

The stock market reacted immediately.

As soon as trading opened, Yokohama Electron’s share price collapsed without mercy.

The stock, which had once climbed as high as 8,800 yen, plunged to 2,300 yen. That was less than half of the 5,200-yen level it had reached before the takeover battle even began.

Its market capitalization also shrank into the 4 trillion-yen range.

And this wasn’t just Yokohama Electron’s problem.

Japan had once been the undisputed king of the semiconductor market, but in finished products it had been pushed aside by the United States, Korea, China, and Taiwan.

Even so, in semiconductor materials, components, and equipment, Japan still held the top spot in the world. It wasn’t a joke to say that if Japan stopped exporting, semiconductor fabs all over the globe would grind to a halt.

But the moment trouble hit Yokohama Electron, Japan’s largest equipment company, the ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠related materials and components firms began to wobble as well.

Because semiconductor materials, components, and equipment made up such a large share of the Japanese stock market, the Nikkei index was dragged down with them.

Investors went berserk.

Yuseong Electronics’ semiconductor plants in China had done business with Yokohama Electron China—equipment sales, maintenance, and everything in between.

But there was no way we could keep dealing with a company that was being run illegally.

Just like the other foreign firms, Yuseong Electronics informed them that it would cut off all business with Yokohama Electron China.

Fortunately, the Chinese government didn’t react in any meaningful way.

“President Jang, did you see this coming at all?”

“I see. Call me immediately if anything happens.”

After I hung up, I muttered under my breath.

“What the hell is this...”

President Jang Deok-gyu was known even inside Yuseong Electronics as the company’s China expert. So much so that the Chinese people who met him used to joke that he felt more Chinese than they did.

And even he hadn’t seen this coming.

Then how the hell did Han Miru know?

The more I thought about it, the more incredible it became.

When I’d first met him, I’d thought he was just an ordinary young man.

He really predicted all of this and moved accordingly...

All this time, he had been pushing aggressively for the Yokohama Electron acquisition. Because of that, everyone had been fooled.

But his real goal was to hand the other side a gift box with a bomb hidden inside.

Enple, PSMC, and Kionos had rushed in without knowing that fact, and when the bomb went off, they took heavy damage.

The damage suffered by competitors was Yuseong Electronics’ gain.

I remembered what Han Miru had told me.

Trust me. Moving forward with the acquisition will definitely help Yuseong Electronics.

He had been right.

It really had helped us enormously.

I called David.

“I told you China wasn’t going to sit still.”

Even so, I’d never imagined they’d seize the company in this way.

China had robbed countless foreign companies over the years.

How many firms had gone into China only to have their technology, equipment, and operating know-how stripped from them?

To enter China, a foreign company had to set up a joint venture with a Chinese partner. For the first few years, everything usually ran smoothly.

But once the Chinese side had learned the foreign company’s technology and know-how, it would finally reveal its true colors.

Even if a problem came up, foreign companies had no real chance of winning in a fight against their Chinese partners.

The ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠Chinese government would pressure them with all kinds of regulations, and Chinese courts would side with the local company.

In the end, the foreign firm would give up, sell its shares, and leave.

That kind of thing had happened countless times in real life.

The French food giant Danone had formed a joint venture in China with Wahaha, but after Wahaha learned its manufacturing technology and sales know-how, it set up separate entities and siphoned off revenue.

Danone filed suit in China.

Since Wahaha had clearly violated the contract, Danone should have won easily. Instead, the Chinese court dragged the case out over and over again.

In the end, Danone negotiated, sold all of its joint-venture shares to Wahaha, and left China.

Daeyeon Car Group had entered the market by forming a joint venture called Beijing Daeyeon with Beijing Auto, but after sales in China declined, it was forced to sell off its shares and factory to Beijing Auto for a song.

But this time was different.

If they had tried to swallow Yokohama Electron China through the Shanghai joint venture, China would have been hit with global condemnation, and the Japanese government would never have sat still.

But because the Shanghai joint venture had voted in favor of the dismissal, on the surface it looked like nothing more than a solo act by Rupert Liu.

And on top of that, he wasn’t even Chinese—he was American.

From the Chinese government’s point of view, that made things easier. They could simply deny any involvement and say it had nothing to do with them.

Unless the authorities step in, this will end in court.

“That’ll take about two years.”

Honestly, it would have been a little better if this had exploded either before the acquisition talks even started or after the deal had already gone through. But it had happened right in the middle of negotiations.

Who would want to take over a headache like that now?

“Still, Chairman Song Gazuki probably won’t be thanking me for this.”

It would make the Enple alliance’s position that much more awkward, too.

“This wasn’t something we caused ourselves.”

True, I had jumped into the bidding war and thrown the company over to the other side, but what had happened in China had nothing to do with me.

This was always going to happen the moment the sale was decided, whether I was involved or not.

But CEO Tim Keaton won’t see it that way.

I remembered the look on his face when I had met him before.

“Well, if he misunderstands, there’s nothing I can do about it.”

Enple, PSMC, and Kionos notified Softbox Group that they were canceling the acquisition talks on the grounds that a material breach had occurred in the contract, then demanded that the $30 billion deposit be returned.

The earnest money was usually ten percent of the sale price.

But the CYP consortium had first offered fifty percent, and once the Enple alliance was also selected as the preferred bidder, it paid the same amount—$30 billion—as its deposit.

Compared to the current stock price, that deposit was effectively twice as high as it should have been.

And once you factored in the additional amount they would still have to pay, it would have been better to walk away and forfeit the deposit than to go through with the acquisition.

But once they had been named the preferred bidder, canceling the contract wasn’t easy.

Until now, they had been doing everything they could to acquire the company. Now they had to do everything they could not to acquire it.

Softbox Group countered that the contract couldn’t be revoked, and both sides moved into legal review.

Watching what had happened in China, Tim Keaton couldn’t keep his composure.

His mind had gone blank, as if someone had driven a hammer into his skull.

Was this the goal from the very beginning?

When the CYP consortium lost the bid, I thought I’d won.

But that hadn’t been the case at all.

If they had simply backed out right before the acquisition, I might have sensed something was off. But because they’d been eliminated by a bid restriction, we’d swallowed the poison without even realizing it was there.

How did he predict this situation? No—did he actually order Chairman Liu to stage a coup?

Even though it made no sense, I couldn’t stop myself from suspecting it.

And beyond the losses themselves, the thought that we’d been completely played filled me with rage.

Thinking of the young Asian man I had met before, Tim Keaton shouted, “Damn it!”

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