Volume 8 Final Chapter Chapter 1258 A Story
Shockwave exposed Nirav Modi's loan fraud at the most appropriate time. On the same day, the share price of Punjab National Bank plummeted by 10%. As the scandal continued to escalate, the share price plummeted by 21.4% that week. Shockwave made a small profit of several hundred million dollars and kept his fame and honor hidden.
KiKi was surprised, "The boss cheated on the loan and ran away, but the company is still going bankrupt? What just happened?"
"It happened at the beginning of last year. The claim of loan fraud and running away is just what the spectators say. Whether it is the bank shareholders or the relevant responsible persons who have not been exposed, they don't care whether the loan procedures are compliant. They only care whether Nirav Modi will and has the money to repay the loan. As long as he repays the money, everything can be discussed."
KiKi's eyes widened. "Is India so magical?"
Nan Yi chuckled and said, "This is not amazing. There are even more amazing ones. In front of us is Vijay Mallya of Kingfisher Airlines. He is a playboy and was used as an example by the Indian government. He is now hiding in the UK and relying on entanglement in the extradition treaty to avoid returning to India to serve his sentence. There is nothing much to say about him. Let me tell you about another amazing person."
"Uncle, tell me quickly." KiKi was interested in Nan Yi.
Nan Yi hugged KiKi and said, "Don't worry, look at the jewelry first, and buy the ones you like. Well, you pay for it yourself."
KiKi looked up and rolled her eyes at Nan Yi, "Uncle, you are so generous."
“It’s a must.”
KiKi quickly walked around the entire jewelry store and hurriedly pulled Nan Yi out of the store, asking him to continue telling the story.
Nan Yi satisfied her and told her the story, "Subra Taroi, the boss of Sahara Enterprise Group, held the most luxurious wedding in the world at that time for his son in 2004, spending nearly $100 million."
"What's the bride's name? I'm so envious of her." KiKi's eyes were full of longing.
"Uh..." Nan Yi thought back and realized that he really didn't pay attention to the bride's name. "I really don't know. She is just a background figure in the story. How could I remember her name?"
KiKi rolled her eyes at Nan Yi again, "Uncle, do you understand? Which woman doesn't want to have a unique and luxurious wedding in the world?"
Nan Yi spread his hands and said, " Okay , it's my fault."
"It's good that you know you're wrong. Let's continue telling the story." KiKi took Nan Yi's arm, rested her head on his shoulder, and was taken away by Nan Yi.
"Almost all the well-known figures in politics or business were invited to the wedding, from the prime minister to cabinet ministers, from Olympic champions to Bollywood stars, and tens of thousands of guests gathered in Sahara City on the outskirts of Lucknow, the capital of Uttar Pradesh.
Sahara City is the palace that Subra built for himself. It covers an area of 1.46 million square meters and its entire structure imitates the White House.
At that time, Subra had friends in both the business and political circles, and he seemed to be more powerful than some of the old families in India. He was a rich man, but he was respected by the poor in India, who were willing to give him money.
"Give the money to him? What does that mean?" KiKi asked.
"This story begins when Subra was still young. Subra was born into a poor upper-caste family. When he was in his twenties and had to support his family, he did not think about working as a laborer. Instead, he wanted to be a boss from the beginning, even if he had to sleep on the floor.
He sold laundry detergent and opened a grocery store, but all ended in failure. It was not until 1978, when Subra was in his thirties after several failures, that he finally found the wealth code that suited him.
Banks are also a kind of business. When opening branches, they will definitely choose areas with a relatively high concentration of potential customers. Places with more potential customers are naturally places where rich people are more concentrated. Banks will gather in wealthy areas to open branches and ignore slums and rural areas.
Subra noticed this keenly. He targeted the idle small money around the poor, played the role of a bank himself, and collected the small money in the hands of the poor.
Subra was a poor bastard who couldn't even afford a decent outfit, so naturally no one would trust him easily. He could only ride a Lameda motorcycle, traveling through the countryside, door to door to sell his money-making fund plan.
At first, he wanted to raise hundreds of rupees from each person, but the situation was not ideal, so he lowered his requirements to 10 rupees, 5 rupees, and not too little. Not only that, he also promised to return three times the interest after a certain period of time. If you invest 10 rupees today, you can get 30 rupees in two years. "
"Uncle, isn't this illegal fundraising?" KiKi noticed it keenly.
Nan Yi waved his hand and said, "Put your questions in your mind for now. When I finish telling you the story, you will understand it yourself. If you still don't understand, I will answer it for you."
KiKi nudged Nan Yi's arm with her head to show that she understood.
"The money was not much, so even if they were cheated, the loss would not be too great. In addition, the interest Subra promised was too tempting, so poor people fell into the trap one by one, ten, a hundred, and soon there were nearly ten thousand. Subra raised two million rupees in less than half a year.
With some foundation, Subra immediately registered the Sahara Group and converted previous customers into agents, or fund managers who pulled in funds. Subra promised the managers high commissions and also gave them heavy tasks, asking them to sell his fund plans to more poor people.
The task is heavy and the managers have no experience at the beginning. In order to get high commissions, many people will choose to start with themselves first, investing all the cash in their homes into fund plans, and then targeting relatives, friends, and neighbors.
It is easier to start with someone you know who has a trusting foundation, so the task is naturally completed more smoothly. After a while, Subra promoted the previous fund managers to senior managers, and asked these new senior managers to convert their clients into fund managers.
KiKi blinked her eyelashes, seeming to want to say something but stopped herself.
Nan Yi noticed her movements, chuckled, and said, "Forget it, just say whatever you want to say."
"Uncle, why do I feel that this operation model is very similar to Orange Insurance, which continuously recruits people, turns employees and their families into customers, and lets them continuously purchase insurance policies themselves."
“Haha, it does look a bit like that.”
Fang's Insurance used to be a shareholder of Orange Insurance, so Nan Yi was quite familiar with its situation. The business model of Orange Insurance was completely different from that of Fang's Insurance. One believed in the iron fist of dictatorship and was confident that it would make its customers suffer in silence; the other worshipped Wong Tai Sin and gambled on probabilities. Once the probability of something happening to a customer exceeded a certain point, it would face direct losses. There were also risks such as insurance fraud and insurance agents embezzling premiums. Insurance was not easy to do.
Originally, if we closed our eyes and pretended not to see Orange Insurance's business model, it could do whatever it wanted and just wait for the dividends at the end of the year. But later it did everything, and its internal management was too chaotic, so the risk control directly issued an orange alert. Fang Insurance had no choice but to withdraw its shares and directly exit the mainland insurance field. It couldn't afford to play this game anymore, so it gave up.
"In this way, under this circular fission system, one person spreads the word, ten spreads the word to a hundred, and even if hundreds of millions of poor people in India pay one dollar, Subra can raise a large amount of funds.
In order to win the trust of poor clients, Subra called Sahara Group a family and every client his family. In addition to verbal measures to bring them closer, Subra also took out 50 million rupees to sponsor 101 couples to get married. In addition, he distributed food to nearly 150,000 poor people, playing the role of a good man very well.
By 1997, the Sahara Group's capital scale had reached 40 billion rupees, which was more than 1 billion US dollars at the exchange rate at the time. In order to ensure a continuous flow of funds and to have a steady stream of money coming in to make up for the shortfall, Subramanian repeatedly expanded the team of fund managers.
Gradually , the scale of the Sahara Group became more and more terrifying, with fund managers reaching an astonishing million. They worshipped Subra as a god, and the entire group became extremely orderly and religious.
When Subra appears in front of fund managers, he always wears sunglasses, a suit and white socks. When the fund managers see him, they put their hands on their chest and say words of praise for Sahara.
With huge funds, the Sahara Group began to do whatever it wanted. It entered the aviation industry and Sahara Airlines was born. It also entered the real estate industry and the luxurious Ambigu Hotel came into being.
The Ambigu Hotel only accepts wealthy people. Although it is a hotel, it is actually more like a large amusement park with various unique facilities, such as hotels, theme restaurants, sound and light fountains, etc.
These are nothing. Subra spent a huge amount of money to build the Sahara City I mentioned earlier, and held the most luxurious wedding of the century. "
Nan Yi chuckled, "You know what, Subra encountered a good time when India's economy was booming. As long as the scale is large enough and a regional monopoly is created, you can make money with your eyes closed. This is also one of the reasons why his funds have not collapsed for more than 30 years.
Another reason is currency depreciation and the fact that new customers often invest twice or more than the previous batch of old customers. The first batch of customers who invested 10 rupees all received their returns, which made the poor people who were not deceived feel that Subra was a trustworthy person, and they all took the bait. Those who received returns took out all their savings, even borrowed some foreign debts, and became new customers again. "
“So, Subra is engaging in illegal fundraising?”
Nan Yi did not answer, but continued to push the story forward, "After the luxurious wedding, several newspapers questioned the Sahara Group. Will the Sahara Group run away with the money and play a huge pig-killing game?
As soon as the news came out, investors became panicked and began to think about withdrawing their investments.
In order to dispel investors' doubts, Subra thought of listing the Sahara Group, because in order to go public, it must disclose its own financial information, such as profitability, source of funds, etc., and it must also be supervised by the Securities and Exchange Commission.
This would make the company more transparent and open, which was obviously not good for Subramanian. However, under pressure from the situation, Subramanian made some adjustments and listed the two large parent companies within the Sahara Group.
Of course, in order to prevent the public from noticing Sahara's problems, Subra has been skirting the law and deliberately concealing some very important information.
Subra's operation immediately angered the SEC. "You damn Subra, do you take us for fools? I didn't get a beautiful girl, and my son's US account didn't have any money deposited. Do you want to fool us like this?"
After waiting for a few days, the SEC still did not see Subra's sincerity in admitting his mistake, so the SEC criticized Subra, saying that the company's investors were unclear and the rules for investors to redeem funds were not clear, and asked him to make corrections as soon as possible.
Perhaps Subra relied on his extensive network of contacts and refused to give in, and directly responded to the SEC in a strong and direct manner: I am not wrong, and you have no right to say anything.
In this way, Subra openly confronted the SEC, and he even made a bold statement: You can investigate as much as you want, I accept the test, as long as you can find that I have done anything illegal, I am willing to be hanged.
The SEC responded: Since Subra is raising funds from the public, it must comply with the SEC's regulations.
Subra retorted: I did not raise funds from the public. Sahara Group is a family business and the investors are all my family members. This is a private placement, not a public offering.
Such words were obviously far-fetched, so the SEC took the matter to the Supreme Court of India, summoned Subrata, and prepared to hold a public trial in court.
Things have not actually reached the worst point yet. Sahara is already a large private enterprise, and the Indian government would never kill it with one blow. But Subra was too arrogant. He dared to ignore the summons of the Supreme Court and refused to show up on the pretext of accompanying his 92-year-old mother.
This made the Supreme Court officials furious, and soon after, the court issued an ultimatum to Subramanian, asking him to immediately return all investors' principal and 15% interest, totaling approximately 250 billion rupees.
This is the largest fine in India's history. However, since Subra dared to defy the court, he naturally had a backup plan. Within just two months, he announced to the public that he had returned the principal and interest to the investors.
The SEC was stunned. How could this be possible? How could Subra have so much money?
In fact, Subra was selling dog meat under the guise of sheep. On the surface, he was returning the money, but in fact, he was transferring the funds. He asked the fund manager to persuade investors to invest in another fund plan. It can be seen that Subra did not want to let the funds go. He did this just to deal with the court's judgment.
The SEC naturally did not buy it and asked Subra to provide investors' personal information and refund receipts.
Subra was also tough. He did something jaw-dropping: he mobilized 127 trucks to transport more than 30,000 boxes of documents and 50 million pieces of information to the door of the SEC. It was obvious that Subra was deliberately making things difficult for the SEC.
The SEC people were also very angry, so they worked in groups of 40 to 50 people, using 80 scanners, to review documents day and night. They also randomly selected 20,000 investors for return letters, but only 68 of them responded.
With such a low response rate, the SEC had every reason to suspect that the investor names and addresses given by Subra were false.
In response, Subra said: Investors are poor people who cannot write. Besides, since they have already received their refunds, why should they bother with the SEC? Obviously, there is no need to reply.
Subra's blatant provocation of the government naturally attracted public attention. Some media also conducted visits and investigations based on the address provided by Subra, but they could not find the investor at all, so there was speculation that Subra was a liar.
Facing huge external pressure, Subra was a little overwhelmed. In order to ease the relationship with the government, he called nearly one million fund managers from all over the country to sing the Indian national anthem together in the square. This move was intended to show his patriotism and to send a warning: You can't bring me down, otherwise more than one million people will face unemployment. "
Nan Yi smacked his lips and said, "Subra has overreached himself. He can easily gather millions of people. Which authority wouldn't be worried? If everyone is given a gun, he will definitely invade New Delhi.
At that moment, his connections failed, the Supreme Court signed an arrest warrant, and Subra was thrown into prison, but he refused to plead guilty. Instead, he wrote an autobiography in prison, portraying himself as a freedom fighter.
Moreover, since Subra was imprisoned, the Sahara Group has hidden its funds and declared that investors would not get their money until Subra was released from prison. As a result, the poor people across the country were furious and pointed the finger at the government, accusing the government of being too rude to imprison Subra.
What happened next was a bit funny. After a stalemate of more than two years, the Indian government probably reached a secret agreement with Subramanian, and he was released on parole. Not long after, the Sahara Group sold real estate to raise US$2.1 billion to repay investors, but the funds were limited to the businesses involving the two listed companies.
The SEC also said that it would only track the refunds of the two listed companies, and that it had no right to question investors who invested in Subra’s other fund plans.
Nan Yi exhaled, shook his head and said, "Subra was released on parole two years ago, in 2016. In less than three years, Sahara Group has taken advantage of the surge in housing and land prices, and its current valuation is close to 10 billion US dollars, and Subra is still the chairman of Sahara.
I saw him build a tall building, I saw him entertain guests, I saw him dig a grave, and when the wind stopped and the rain stopped, the building didn't collapse, but instead it got even higher. Doesn't it sound like an absurd pantomime?"
KiKi let go of Nan Yi's hand and asked in horror: "Is Subra okay?"
"Not on the surface, but there will always be some loss in private."
"What about the poor investors? Where is their money?"
"There is no conclusion yet, and there may never be one. In the face of an economic crisis, the best solution is to dilute the risk, distribute it reasonably, and pass it on to everyone. This way, everyone shares a little, so as not to suffer serious consequences, and recovery can be achieved after a period of time.
Treating Subra as a minor economic crisis and reversing the process may not be so bad. As long as the media does not mention it, people will naturally choose to forget about it after a while and no one will mention it again.
KiKi couldn't understand, "But, on what basis does Subra have?"
Nan Yi sneered, "Then I don't know. Maybe the key to everything lies in the secret agreement. The disputes in the world are all due to inequality. When the strong agree on a certain distribution method, the world will enter a brief period of peace and tranquility.
For example, if you and I share, you have 1 cent and I have 1 billion, that is the most reasonable way of distribution, so we can quietly stick together and take a walk. "
KiKi blushed and said, "Uncle, you are so dirty and shameless."
"How am I dirty? Are you over-interpreting it?"
"You know it well enough."
"I don't know."
The two had a brief argument about whether it was dirty or not, and whether it was clear or not. But after returning to the hotel, the argument lost its necessity. Both of them became dirty, unlocked new postures, and did not follow the usual path.
When the sun rose again, KiKi was still doing hard labor, while Nan Yi went out to meet guests.
First it was Xue Xiaomin and Pabu Vaze, the three of them met at Pabu Vaze's villa.
The localization of NEWME was completed with the help of Pabu Vaze, so Xue Xiaomin knew her. The two had similar personalities and had frequent contact.
