Later, Gan Yang would often reflect on the experiences of that period. It seemed that everything began to change from that day.
After ending the video call with Ding Zhitong, he went to have dinner with Liu, intending to tell her he should return to New York. If suitable flights were available, he planned to change his ticket and leave a few days earlier.
But at the company entrance, he ran into Gan Kunliang and his two uncles. They were talking but fell silent upon seeing him, adopting the demeanor of elders greeting him. Gan Yang exchanged perfunctory greetings, and the three men left in the elevator. He turned towards Liu’s office, where someone else was seated, discussing something with her.
At that moment, Gan Yang had a strange intuition that these two groups had just dispersed and were discussing the same matter.
Liu saw him through the glass wall, her furrowed brow relaxing into a smile. The person sitting opposite her turned around, stood up to open the door for him, and asked with a smile, “Yangyang, do you remember who I am?”
“How could I forget Director Long?” he smiled back.
Just as he called his mother “General Manager Liu,” he had always called Long Mei “Director Long.”
Long Mei had started as a factory accountant, working with Liu since her twenties. Now in her early forties, she had risen to her current position. After Liu’s business expanded, she hired a finance director from a prestigious university with multinational corporation experience. Although Long Mei’s educational background wasn’t as strong, she still held the title of financing director, remaining among the senior executives. At annual parties or in group photos of directors and supervisors, the two women were always the only Mulans among a group of men.
So, the three of them had lunch together.
The conversation during the meal was pleasant, filled with aunt-like and motherly concerns for him, until he casually mentioned, “I just ran into Mr. Gan at the entrance…”
Liu immediately explained, “Your father came today because of a pollution fine at the sole production factory. It’s nothing serious.”
“Oh,” Gan Yang nodded, not pursuing the matter further.
Long Mei glanced at Liu, then at him, as if wanting to say something, but ultimately just lowered her head to drink tea.
That strange intuition returned. Throughout the meal, Gan Yang didn’t mention changing his flight ticket. After they parted, he called Long Mei.
On the phone, Director Long still sounded like an aunt concerned about her nephew returning from studying abroad, but finally said, “Yangyang, let’s find a place to talk.”
Hearing this, Gan Yang was certain the situation wasn’t simple, and that Long Mei was keeping something from Liu.
They agreed to meet at a teahouse in the old town. Long Mei spoke briefly as an aunt to her nephew before getting to the point. She opened her laptop and showed him several contracts, some materials being prepared for the IPO application, and the company’s financial statements for the past two years. Finally, she asked, “Yangyang, you studied finance, so you should understand all this, right?”
Gan Yang felt a moment of confusion. He could indeed understand but had rarely connected these things to reality.
That day, Long Mei took him to several places, finally bringing him to a factory in the new district. She even had a phone call with auditors and lawyers from Shanghai, letting him listen throughout. By the time he understood the whole situation, night had fallen.
Outside the window, the factory area’s lights glowed softly. Gan Yang gazed aimlessly through the glass before finally asking, “What can I do?”
Long Mei supported her forehead with both hands, sighing, “To be honest, I don’t know either…”
Two years ago, Liu had begun preparing for an A-share listing, with the final round of financing completed early last year.
The agreement stipulated that if a qualified listing wasn’t achieved by December 31, 2008, shares would be repurchased from investors at a 10% simple interest rate of return.
This was a common practice in the industry, and at the time, the risk didn’t seem too great.
The company was developing well, with rapidly growing profits. The timeline in the IPO plan was set quite generously, and even if the listing was obstructed, a buyback wouldn’t be too difficult.
This wasn’t a rash decision by any one person, but clearly, no one had anticipated that all foreseeable and unforeseeable risks would occur simultaneously. The international market was sluggish, orders had decreased significantly, and the USD to RMB exchange rate had dropped from 7.80 in 2006 to the current 6.89. Domestically, credit was tightening; previously approved standby credit lines were almost entirely frozen, and existing loans couldn’t be extended.
The consequences of these multiple pressures were predictable.
The figures in the IPO application materials were still from last year. If replaced with this year’s first-quarter data, the calculated valuation and projected profitability would undoubtedly be vastly different. The second-quarter results weren’t ready yet, but they were sure to show a continued downward trend.
Gan Yang knew the situation was serious but didn’t fully grasp its extent. Long Mei explained that the issue of sustained profitability was the main reason for the IPO’s likely failure, compounded by Gan Kunliang’s release from prison, which might be seen as a potential change in actual control and management. The pollution violation at the sole production factory was also true; Gan Kunliang had only been working for a few months before incurring an administrative penalty and a substantial fine, adding issues of qualification defects and non-compliance to their problems.
Of course, the most crucial factor was profitability.
“What in this world isn’t about money?” At that moment, Gan Yang suddenly recalled Ding Zhitong’s catchphrase.
Logically, if a company experiences a performance decline while preparing for an IPO, it should pause the process and wait for business to improve before starting over. Moreover, since late 2007, the industry has been cautious about the 2008 stock market, with IPO reviews becoming more stringent. In their current state, passing the review was virtually impossible.
Realizing this, Gan Yang was genuinely stunned. After a while, he could only ask, “If we buy back, do we have enough money?”
“It’s very difficult,” Long Mei shook her head. “Worst case, bankruptcy and liquidation.”
Long Mei used to share an office with Liu. As a child, Gan Yang often did his homework there, listening to her phone calls with banks about bill discounts and loan maturities. She knew every transaction as clearly as her household accounts. If Long Mei said it wasn’t enough, it probably truly wasn’t.
He suddenly recalled Liu’s words: “If orders are high, we do more; if they’re low, we do less. What else can we do?”
He knew his mother wasn’t originally a very career-driven person. Back then, she had been forced into this position when Gan Kunliang went to prison. Perhaps when she said those words to him, she had already considered this worst-case scenario. She faced it calmly, thinking it wasn’t a big deal.
So, Gan Yang began to mentally prepare himself, thinking they might have to live frugally in the future. But as Liu had said, even if they went bankrupt and liquidated, what of it? The company was already a limited liability entity, and Liu was at an age where retirement would be normal. As long as he set aside his complicated thoughts and worked hard, life could still be quite good.
But Director Long wasn’t finished. She looked at him, shook her head again, and said, “I misspoke earlier. Bankruptcy and liquidation isn’t the worst possibility.”
Gan Yang felt a sense of irony. He thought to himself, “I’ve just resolved to work hard, and you’re telling me it could be worse?!”
Long Mei gave a bitter smile and finally told him what the worst scenario truly was.
After hearing everything, Gan Yang still didn’t know what he should do, but he thanked Long Mei nonetheless.
Long Mei replied, “Don’t thank me. If things continue this way, I won’t be able to escape either. I’m a middle-aged woman – whether I lose my job or go to prison, neither option appeals to me.”
Gan Yang nodded, understanding her meaning. But even knowing all this, what could he do?
When he left, night had fallen. Gan Yang walked alone for a long time until he thought he had figured everything out. Only then did he call to arrange dinner with Liu and pick up Gan Kunliang.
Again at the hotel in the old town, Liu arrived late. Entering the private room and seeing Gan Kunliang there, she sensed something was amiss.
Gan Yang stood up, pulled out a chair for her to sit, and said, “Let’s eat first, then we’ll talk.”
That meal, though he had ordered the dishes, was the first time in his life he couldn’t taste the food. He ate silently, dismissed the waiter, closed the door, and then looked at his mother and said, “Mom, I met with Director Long again this afternoon. She told me everything about the company’s situation.”
Liu didn’t respond, slightly lowering her head to avoid his gaze.
Gan Kunliang interjected, seemingly unfazed, “You’re being so serious today, I thought it was something major. Just for this? A bit of financial maneuvering – turn 1 billion in sales into 1.5 billion, 50 million in profit into 100 million. With all these factories and workers here, it’s manageable.”
Indeed, Long Mei hadn’t been wrong. Liquidation wasn’t the worst possibility; this was.
“Financial maneuvering? What kind of maneuvering?” Gan Yang struggled to control himself as he addressed Gan Kunliang. “The company’s legal representative and actual controller is Liu. If problems arise, she’ll be the one held responsible. Are you trying to send her to prison?!”
“It’s not that serious,” Gan Kunliang’s smile deepened as if looking at a child who hadn’t even grown his first beard. “Hundreds of companies are queuing for IPO approval, dozens succeed each year. Do you think any of them are completely clean without a single flaw?”
Gan Yang scoffed, retorting, “Is that what you thought before you went to prison?”
“Yangyang!” Liu finally spoke up to stop him.
Honestly, Gan Yang hadn’t expected his mother to silence him rather than Gan Kunliang.
Gan Kunliang continued, “Your mother and I are getting on in years. How much can we spend even if we make money? Why do we do all this? It’s for you. We have to take a chance, and make an effort, don’t we?”
Gan Yang ignored him, addressing Liu directly, “Don’t listen to him. I don’t need you to do such things for me!”
Liu looked at him but seemed hesitant to speak.
“Then what do you suggest we do now?” Gan Kunliang spread his hands across the table. “Your mother signed the agreement herself. If we can’t go public by the end of this year, we have to buy back the shares according to the agreement, plus interest. Did Long Mei tell you about the funding gap? At least 200 million. Can you pay for that?”
Gan Yang was at a loss for words. If he had to spend 200 million, he wouldn’t feel much pressure. But earn it? He had no idea how.
Gan Kunliang could easily read the thoughts of this twenty-something student. He softened his tone and advised, “Yangyang, how old are you? What you learn in school doesn’t always work in the real world. Look at those lawyers and auditors, graduates from top schools like you, working for big-name foreign firms. They understand how things work. Your mother and I will handle these matters. You don’t need to worry about it.”
Gan Yang felt his anger rising and stood up abruptly, but Liu held him back.
Liu looked up at him but addressed Gan Kunliang, “Step outside for a moment and close the door. I need to talk to my son.”
Now it was Gan Kunliang’s turn to be surprised that his wife would dismiss him like this. But he nodded and left, adopting a tolerant attitude. His ten years in prison hadn’t been for nothing; he knew their positions were now vastly different from before.
The door closed behind him, and Gan Kunliang’s footsteps, with the peculiar rhythm of his post-stroke gait, gradually faded away.
Gan Yang tried to persuade his mother: “Director Long and I have looked at all recent IPO cases. There was one company that submitted its application materials last year, passed the review in March, and received IPO approval in early May. They had already collected the money, but when problems were discovered, everything was halted and returned to investors with interest. Please don’t consider such ideas. Given this year’s situation, it’s impossible…”
But Liu seemed not to hear him, speaking as if to herself: “Yangyang, the two properties in Hong Kong are in your name, and I’ve set up an offshore trust for you. Also, that apartment in Shanghai you mentioned – go look at it soon. If you like it, buy it. You’ve graduated from university and have a girlfriend now. If anything happens, you two can live your own lives. As your father said, you don’t need to worry about things here. I’ll handle it.”
As Gan Yang listened, he felt shaken. He suddenly remembered another thing Liu had said – “I won’t let go of what needs to be protected.”
So, she had already prepared an escape route for him long ago.