Dear Comrade Leader, Episode 135
Rumors of George Soros’ interest in acquiring Fujitsu quickly spread like wildfire and shook the Japanese political and financial scene like an earthquake.
What kind of company is Fujitsu, isn’t it one of the representative companies in the Japanese electronics industry that has conquered the world along with Sony, NEC, and Sharp Electronics?
From personal PCs, which are slowly starting to be commercialized in earnest, to laptops and ATMs, it is also a pioneer in the history of computers in Japan, regardless of business and private sector.
However, the sale of such Fujitsu to American financial capital was unacceptable even with the general sentiment aside from protecting the national wealth.
What’s even more upsetting for the Japanese is that George Soros, who can be said to be the forerunner of the US financial capital, is unlikely to have any serious interest in Fujitsu management in the first place.
“Improvement of shareholder value, transparent management, and backward improvement of governance? Where did this greedy old white pig get cocky… … After all, who knows that money is the goal?”
“After all, it is all nonsense to say that you are participating in management! Once you have secured a stake and have a voice at the general shareholders’ meeting, in the name of rationalization of management, you can send out all Japanese employees, reduce the cost of technology development, temporarily inflate the value of your stake, and then sell it to the place where you value the most. I’d say! This Japanese company, technology!”
“At the time of the bubble, he and the Wall Street gang got together and had a drink, but there are also rumors that he is trying to step on Japan completely with that guy in America. Even now, the Vice President of the United States, who is already called Dick Cheney, is also said to be anti-Japanese… … .”
Still, in a situation in which attempts to stimulate the economy fail one after another after experiencing national setbacks due to the collapse of the bubble and being wary of foreign capital trying to take over their own companies… … .
Soros, a fund manager who made a profit by attacking the pound a while ago, could be said to be the emergence of a ‘black ship’.
And after a while, when Soros really started to buy Fujitsu shares as he said, conspiracy theories began to spread in Japan that Wall Street financial capital would attack Japan and destroy it completely.
Originally, Japanese companies were preventing foreign capital from extorting companies by sharing shares between their own banks, such as Mitsubishi Bank, and public financial corporations, which were paid for by Japanese people’s taxes.
At the time of the real estate bubble, it was difficult to find a Japanese bank that did not step into the bubble, such as lending money to companies that invest in real estate or investing directly in real estate at the bank level. because it was received.
In a situation where small banks that lost their deposits collapsed when their real estate turned into non-performing assets, and the financial situation of large banks was severely strained, it is now public funds, that is, taxes that can stop the capital attack by large foreign hedge funds. there was no outside
However, there was a problem here, too, when public funds prevented Soros from depriving Fujitsu of management rights.
“no! Don’t you know that person’s history, buying Fujitsu shares here is nothing but putting the Japanese people’s taxes into Soros’s pocket!”
“But still… … .”
“Look at what he is doing now. He is spreading rumors around the neighborhood and greatly raising the price of the Fujitsu shares he is buying.”
“… … .”
“They are using the press as a megaphone, hoping that these Japanese people will be surprised and buy the stake at a high price. You know what American corporate hunters do!”
In Katsumigaseki, where the Japanese government offices are located, there was a controversy every day.
The strategy that George Soros-run hedge fund now proclaims and shows for Fujitsu is the same as that used by hedge funds that will be called Activism hedge funds in the future.
It buys shares in companies with backward governance, that is, closed and inefficient companies, and raises stock prices significantly through short-term earnings improvement or media play promoting them.
In this process, they do everything they can to make strong restructuring, reduce R&D budget, and sell affiliates if necessary. In this process, the company’s fundamentals and long-term future competitiveness will be greatly damaged, but their goal in the first place is to realize single-shot profits, such as corporate competitiveness. Because it’s not an alpha.
And when the stock price rises, they demand a dividend or sell their stock to make a huge amount of money and then quit the business.
The main targets of these corporate hunters are companies that have large internal reserves and do not pay dividends well… … .
From the point of view of minority shareholders, it is not a bad thing because they can take a share in the process of distributing dividends (and the stock price also rises significantly), but from the point of view of a business person who focuses on long-term management value, it is a starving hyena that eats flesh. It made no difference.
And it was no different for the economic bureaucrats who pushed and dragged along with the export giants to make Japan what it is today.
“Then what are we going to do? Are we just waiting to see this Japanese company being sold into the hands of foreign hedge funds? Whether you are moving the Welfare Pension Fund and mobilizing taxes or whatever you do, you have to make a political decision… … .”
“That’s what he wants! Have you checked the Fujitsu stock today? It’s already terrifying. In addition to the value of the name Soros, minority shareholders are likely to have expectations for dividends. Are you saying that by raising the stock price higher here, that greedy bastard can profit more?”
Although it has been quite some time since these activist hedge funds started showing their teeth to Asian companies.
Elite officials of the Ministry of Finance of Japan suddenly realized that Soros had no interest in running a business, and they intuited his purpose.
That he would only contribute to the realization of profit margins if he went out here for nothing.
In the meantime, Soros’s fund smoothly purchased Fujitsu’s shares, and finally became the second-largest shareholder after Fujitsu’s largest shareholder, ‘Fuji Electric Co., Ltd.’.
When he finally had the authority to intervene in Fujitsu’s management, the first thing he demanded was, of course, the convening of a general meeting of shareholders.
“Until now, this Fujitsu has been managed very irrationally and out of date. Now is the time for shareholders to step forward and change that.”
Soros proclaimed so after calling the representatives of Fujitsu’s minority and major shareholders at the general shareholders’ meeting at Tokyo’s Mori Tower.
Of course, what Soros and his agents asked for from the family of Fujitsu’s founders, who sat on one side of the chief executive, to the current executives with a chewy expression on one side of the chief executive, were of course to be expected.
1. Business rationalization was carried out by selling subsidiaries other than the main business, representing the real estate that increased unnecessarily during the bubble period.
2. In order to increase shareholder value, the cash secured through the above items and the accumulated reserves shall be released to immediately pay dividends to shareholders.
3. Reduce technology development costs and improve corporate governance by repurchasing treasury stock. Also, fire current executives who have harmed the interests of the company and its shareholders.
Read at noblemtl.com
Naturally (with the exception of Fujitsu’s minority shareholders, who received dividends), there was a strong backlash in Japan.The economic downturn caused by the bursting of the bubble is also depressing, but now, lament that some foreign capital is coming in and trying to destroy Made in Japan technology has filled the economic support space.
Some even raised the extreme claim that the United States carried out a second atomic bomb under the name of financiers, Soros.
There were criticisms such as what the government is doing, and protect Japan’s electronic technology by moving the Bank of Japan right away, but there was no such thing as a sharp policy for the bureaucrats.
The transfer of management rights to Japanese companies is also a problem, but buying Fujitsu shares here is no different than helping Soros get investment returns out of the pockets of Japanese investors.
-We need a Japanese White Knight to protect Fujitsu against Soros, the ‘Black Ship’ hedge fund monster!
The White Knight, the word for friendly forces and funds to protect management in the face of hostile merger and acquisition attempts, finally appeared in the newspapers.
And, as if in response to such a wish, a Japanese investor with Japanese citizenship appeared as a white knight with the condition of maintaining the current management.
“Fujitsu Co., Ltd. is a long-established Japanese manufacturing company that has accumulated technology for a long time since the end of the war, and is an electronic company looking to the future 10 years. As an investor and manager preparing for the coming IT era, and at the same time as a Japanese who values craftsmanship and the spirit of monozukuri (a Japanese word for making things), the predatory behavior of Soros and his fund You will never be able to sit still and watch!”
The identity of this investor who appeared bravely as if to promote that he was a pure-blooded Japanese who looked up to the sky was unexpected… … .
It was Masayoshi Son, a millionaire investor and CEO of SoftBank (which is already a fact for some sitting in Pyongyang, far away from the Japanese archipelago), that was Son Jeong-ui.
* * *
“Now it’s time for Son Jeong-eui, Son Masayoshi to start appearing. I invested the money for the merger and acquisition, so let’s see the skill.”
Far away, in the clerk’s office in Pyongyang, hundreds of kilometers from Tokyo, where the uproar was taking place, Jeonghwan muttered as he put down a Japanese newspaper that read ‘Masayoshi vs Soros’.
Then, Hyerim Yoo, who was carefully reading the newspaper with her, nodded her head.
“When you first mentioned Seongdonggyeokseo, it was a long thought, but it is a strategy that was not really revolutionary, Comrade General Secretary. With this, through Son Jeong’s comrade, the Korea Investment Corporation of the Republic of Korea can obtain Fujitsu’s stock relatively easily… … .”
“yes? What do you mean? Wrong, Lieutenant Yu.”
“yes?”
At the Workers’ Party of Korea No. 1 building in Pyongyang, Jeong-hwan felt the need to explain to Yu Hye-rim, who had a tilted face.
Lately, to be of some help to Junghwan, at least to understand what she is saying, she has set aside time to study capitalism and even has a teacher to study, but still, she will not be as good as teaching by herself.
“However… … Soros… … Wasn’t he using his comrade to inflate the sense of crisis about acquiring foreign capital in Japan and later to bring Fujitsu technology to the republic through Son Jeong’s comrade?”
“You were half right, Lieutenant Yu. It is correct to use Soros to open a smoke screen operation and to open a sequel, and it is also true that Fujitsu is interested in the stocks he owns. But what I was aiming for this time was not Fujitsu’s technique. The other side.”
“… … If it’s the other way around… … .”
“I am not interested in Fujitsu. What I am interested in is not another company, to be precise, Fujitsu Corporation itself, but rather the stock of a company they own.”
Anyway, according to what Jung-hwan knows, in the distant future, Fujitsu will lose its hegemony in the electronics industry and be absorbed by China.
Read at noblemtl.com
No, in fact, not only Fujitsu, but the decline of the Japanese electronics industry began in 1993 itself.If you are going to pay a high price to bring in technology, you should buy a company that has technology that can create high added value continuously in the future, so there is no need to waste money.
For a while, I had been studying Fortune and Forbes diligently, but Yoo Hye-rim still didn’t understand a lot of things she didn’t know.
“To give you a clue, it was the first private company in Japan to successfully manufacture numerical control machine tools and CNC servo motors, and it is still a company that is competing for the world’s top spot in the metal cutting and automation fields.”
Still, Hyerim Yoo couldn’t get a hold of it.
“Don’t you think that this is a company that is really needed in this republic, which lacks the production of parts, which can be said to be the basic foundation for industrialization, that is, the precision processing of metals?”
And although it could not be explained now, Jung Hwan also knew that in the future, when the era of smartphones and semiconductors returns, the importance of the company will increase, and it will occupy a position of absolute power in the field of industrial robots and semiconductor processing equipment.
Although the time they spent together in Japan was quite long, Hyerim Yoo was still worried whether the communist country was still running out of water or because it was not a company that directly produces consumer goods.
“If you listen to what you say… … It doesn’t seem like a so-called B2C company that sells products directly to the people. Then it means that we have strengths in the field of business transactions with each other… … .”
“right. However, as much as they have excellent technology, their secrecy and closure are unusual even in Japanese companies that are paranoid about technology leaks. Are you investing in the development of unmanned process robots instead of relocating factories overseas despite the recent strong yen?”
“That’s right.”
“To get the management of a company like this, you have to mobilize some of the best hedge fund managers in the world, don’t you?”
“Well… … But I still don’t know what that establishment has to do with Fujitsu. Why do you have to call Soros all the way to Pyongyang and ask the general secretary comrade him with a disappointing voice? … .”
“The company started out as an in-house project team in Fujitsu right after World War II and became independent from Fujitsu in the 1970s. But Fujitsu still owns 18% of the company.”
In the original history, the equity relationship was completely liquidated only in the 21st century, but from what Jung-hwan now knows, the aftermath of the bubble burst was greater than the original, and ‘the company’ seemed to lack the financial power to purchase treasury stock.
Having said this up to this point, Jeonghwan stopped playing with the twenty-four hills and told Hyerim Yoo the true goal he had been aiming for from the beginning.
“Major Yoo, do you know about a company called FANUC?”