Chapter 2: A Confused Tragedy

Song Shumin initially made two preparations, entrusting a canning factory on the verge of bankruptcy to his eldest son. Due to the dire situation of the factory, the local government was indifferent, allowing the eldest son of the Song family to easily obtain full ownership of the factory and, with the assistance of Song Shumin, quickly turned the losses into profits

Do not think of this as a good thing; the hardware and plastic factories that have been merged are both suffering significant losses. Due to their remote location in the southwestern region, there is no one willing to buy them even if they were to be dismantled and sold. The land on which the factories sit has no development value, and every year, Song Shumin has to obtain funds from the distillery to cover the losses.

In fact, the losses of state-owned enterprises are not significant, the arbitrary interference of factory x's secretary is also not a major issue, but the most frightening aspect is the lack of clarity regarding the company's equity structure

Song Shumin is indeed too impatient; he is still young. As long as he works diligently for a few more years, state-owned enterprises will begin large-scale reforms. By then, he will not need to engage in any illegal operations, as local officials, in pursuit of reform achievements, will inevitably find ways to actively offer him shares. Many of the wealthy individuals who emerged around the year 2000 in China made their fortunes in this manner

According to Song Shumin's vision, even if he were to commit a crime and end up in prison, his family would still be able to live well relying on the canned food factory

Yes, debt.

There is no right or wrong in this matter; it is a muddled account

Both the renowned Kelon and Jianlibao are in such a situation, where unclear equity has led to endless troubles. Ultimately, the president of Kelon was forced to resign, while Jianlibao declined amidst disputes

The municipal government was overjoyed and assigned several other loss-making state-owned enterprises to Song Shumin for management, even aspiring to create a local large group with a demonstrative effect

In Song Weiyang's memory, ever since his father was imprisoned, the distillery quickly fell into difficulties. Under the leadership of the new factory director, nepotism in hiring, rigid management, weak marketing, and corruption... A series of problems emerged one after another, gradually losing market competitiveness, and ultimately being merged by a distillery in the provincial capital in 1998

Song Shumin ultimately chose to take a risk. He first used the excuse of generating foreign exchange to travel to Singapore, where he quietly registered a company and transferred assets. Subsequently, he acquired a nearly bankrupt Hong Kong company under the name of the Singapore company, and then had others operate under the banner of Hong Kong merchants to engage in joint ventures, thereby achieving ownership of shares for the management team

Moreover, the number of hired workers in the winery reached 12. According to the boundaries defined in "Das Kapital," when the number of hired workers reaches 8, it falls under the category of capitalists, leading to the phenomenon of "expropriating the surplus value of laborers"

As for our protagonist, Song Weiyang, he has transformed from a wealthy second-generation heir into a fallen young master, with his family burdened by debts exceeding 3 million yuan, not including the unpayable bank loans

Song Shumin exerted all his efforts and finally attained greater power. After sidelining the factory's Party Secretary, he successfully turned these two state-owned enterprises from losses to profits

... ...

Who would have thought that the distribution of spoils was uneven? Some members of the management felt they received too little and directly sent a letter of complaint to the provincial authorities, leading to Song Shumin being quickly "controlled".

To the ordinary people, Song Shumin is a big boss, the renowned richest person in Rongping City. However, in the eyes of the leaders, Song Shumin is merely the director of several state-owned enterprises, and everything in the factory belongs to state assets

Let us take a look at Song Shumin's resume, as he has entered the palace for the second time this time

The actual charge against Song Shumin is "embezzlement of state-owned assets," but the 1990s had its own unique style. To avoid dampening the reform enthusiasm of entrepreneurs, such cases were generally casually sentenced to charges like bribery or corruption, while the true charges were not even mentioned, and such cases were numerous.

Upon investigation, it was indeed the case that the winery established by Song Shumin illegally occupied bottles that were supposed to be supplied to the state-owned distillery, and also illegally purchased grain from the city's grain station for brewing purposes. Although those bottles and grain were paid for at high prices, such actions were indeed illegal in the early 1980s

At that time, the entire country was cracking down on typical cases of "speculation and profiteering." The working group was at a loss as to whom to target when they suddenly spotted the Song family's house from a distance along the suburban highway. It was a three-story small villa, with its exterior still adorned with white ceramic tiles, which was nothing short of a luxurious mansion in the early 1980s

This indeed belongs to tragedy

Song Shumin was sentenced to fifteen years of imprisonment for illegally occupying state-owned assets and pursuing a capitalist path.

As the central government accelerated the pace of reform, the Song family's distillery flourished. Particularly by the late 1980s, due to the failure of price controls and the national financial downturn, the central government issued the order "famous liquor is not to be served at banquets." Taking advantage of this opportunity, the white liquor produced by the Song family expanded its market and received support from the municipal government, becoming the preferred liquor for local grassroots units.

Everything is proceeding very smoothly, and the municipal government is delighted with the influx of Hong Kong investment.

However, with the rise of health supplements, the increase in various beverages, and the joint anti-dumping measures by European and American countries against Chinese canned goods, the once-popular canned fruit market has rapidly declined

The Song family not only merged with the state-owned distillery but also acquired the hardware factory and the plastic factory in the city.

Fortunately, he only spent half a year in prison, as the central policy suddenly relaxed, allowing Song Shumin to be released early.

In light of this lesson, Song Shumin no longer dared to reside in the countryside villa, nor did he dare to expose his wealth. In order to operate legally, he could only affiliate his winery with the town government, transforming its nature from a private workshop to a collective enterprise (i.e., a township enterprise)

Now, Song Shumin has become a prisoner, and the winery he managed has also changed its director, having no connection whatsoever with the Song family.

In 1982, during the spring of reform, a "late spring chill" emerged, and the provincial "Task Force for Combating Speculation and Profiteering" was stationed in this city

In a certain era, the distinction between private enterprise owners and state-owned enterprise executives was very blurred

The warehouse of the canning factory is now filled with backlogged goods, and the distributors are demanding refunds. Additionally, payments to fruit farmers, workers' wages, and amounts owed to partner enterprises are still outstanding. In his previous life, Brother Song unexpectedly died due to a debt dispute related to the canning factory.

Although Song Shumin manages multiple enterprises and possesses assets worth hundreds of millions, he is merely a steward, with not a single penny belonging to him personally—even though he built the winery from the ground up.

In order to gain the strong support of the municipal government, Song Shumin had no choice but to accept everything and, with great reluctance, take over those loss-making state-owned enterprises

Song Shumin was originally a sent-down youth in Shenghai City. Due to marrying a local girl and having children, he chose not to return to his hometown and instead remained in the township, becoming a grassroots civil servant. He subsequently established a brewing workshop, which gradually developed into a small-scale winery

The tragedy of the Song family thus laid the groundwork for future events. Although the winery was established by themselves, due to its affiliation, it was collectively owned, with no clear division of shares. This was a unique historical product of the 1980s

Taking advantage of the situation where the state-owned distillery was caught in a triangular debt, Song Shumin actively engaged in various activities and finally succeeded in merging the largest state-owned distillery in the city

Immediately thereafter, Song Shumin consulted an economist, hoping to achieve equity restructuring through the MBO method, but was ultimately halted midway by the municipal government

Thus, the comrades of the working group said: "To be able to afford such a good house, one must certainly be a capitalist"

A few years ago, the coastal regions popularized "quantitative reform" and began implementing equity distribution, which enabled many township entrepreneurs to become true millionaires. Song Shumin also wanted to learn how to do this, but Rongping City is located in a remote area, and the officials have a very rigid mindset, completely refusing to accept the so-called "quantitative reform".

At that time, the entire country was engaged in such practices. Local governments were troubled by the mess left by state-owned enterprises, seizing upon a star enterprise to package and generously offer it, either through joint ventures or direct mergers. Since it involved the merger of township enterprises with state-owned enterprises, all of which were of a collective nature, there was still a factory secretary overseeing the operations. Song Shumin did not even have the authority to dismiss a single worker.

The family-owned distillery that was making a fortune has been confiscated, while the equity of the severely loss-making canning factory is clearly defined, and they must find a way to repay these debts