N-M Chapter 191 Blitzkrieg
Chapter 191 Blitzkrieg
(A long chapter of 5,800 words)
Late September 1989.
It has only been three days since Sony Group held a press conference in Tokyo to announce its acquisition of Columbia Pictures in Hollywood.
This landmark deal was initially ignited by the sudden emergence of SA Entertainment with a $5 billion all-cash offer. When this bombshell hit Nasdaq, the spotlight of Wall Street and the entire American media instantly turned on this mysterious offshore institution.
However, just as all parties were trying to delve into its financial background, SA Entertainment unexpectedly released a statement. Claiming that based on "strategic synergy between hardware ecosystem and content distribution," it was transferring the lead in the acquisition to the Sony Group, and then signing a withdrawal agreement, completely disappearing into the background.
This abrupt and utterly ruthless withdrawal left the global media, attempting to track the flow of funds, experiencing a dramatic loss of focus.
The massive inertia of public opinion couldn't be stopped immediately. All the spotlight and political firepower were naturally directed at Sony, which had stepped into the limelight.
In the outside world's analysis, this press conference completely ignited polarized emotions. Tokyo newspapers were filled with the public's fervent pride that "Greater Japanese capital has bought the heart of American culture"; while on the other side of the ocean, the American public and members of Congress on Capitol Hill unleashed their xenophobic and fearful anger on Sony's most prominent brand.
Sony voluntarily shouldered this heavy political cross, bearing unprecedented administrative pressure on behalf of all dormant Japanese capital.
Washington, D.C., United States.
The continuous autumn rain had lasted for a full forty-eight hours. Dense raindrops, driven by the gale, pounded relentlessly against the towering bulletproof windows of the federal district courthouse. The greyish-white sky cast an oppressive shadow over the entire city.
Heavy, hurried footsteps echoed through the corridors of the federal courthouse.
Arthur Vance strode forward. The hem of his dark gray windbreaker was soaked with rainwater, and droplets slid down the edges of the fabric, leaving a trail of water stains on the marble floor.
He strode to the end of the corridor, placed his hands on the heavy oak door, and pushed it open with a sudden burst of strength.
"Bang."
A dull thud echoed in the spacious judge's office.
The federal judge, who was reviewing case files, was interrupted by the sudden loud noise. His fingers, which were holding the pen, paused slightly. He looked up, his gaze passing over the frame of his reading glasses, and landed on the intruder.
Ignoring the hint of displeasure in the judge's eyes at being disturbed, Arthur Vance strode to the large mahogany desk.
He pulled out an extremely heavy brown paper file folder from under his arm, untied the wrapped cotton thread, and slammed a stack of hundreds of pages of trading logs heavily onto the table.
The edges of the paper emitted the lingering, acrid smell of the copier's heating probe after it had been working, mixed with the damp, cold scent of rain emanating from Arthur.
"Your Honor. This is the Nasdaq underlying trading data compiled overnight by the SEC's (Securities and Exchange Commission) Enforcement Division Seventh Investigation Team."
The federal judge, sitting behind his desk, pushed up his reading glasses, his gaze lingering for a second on Arthur's rain-soaked and slightly disheveled trench coat before settling on the dense green printed characters.
"One hundred offshore fund accounts registered in the Cayman Islands, the British Virgin Islands, and Luxembourg." Arthur extended his index finger and traced it across a row of data on the paper. "Over the past two months, they have been secretly accumulating shares in an extreme ultraviolet light source laboratory in California and three top multi-axis machine tool manufacturers in Ohio."
"These accounts made purchases with millisecond precision. Even more unusual, each individual account held a fixed percentage of 4.89% of the target company's shares."
Arthur withdrew his hand, leaned forward slightly, and looked directly at the judge.
Four point eight nine percent. This is only 0.11 percentage points away from the five percent threshold set by the U.S. Securities Exchange Act, which requires disclosure to the public and regulatory agencies.
As long as these accounts do not cross this red line, they will forever remain "dark waters" that do not require disclosure under the current regulatory system.
"Once these accounts are proven to be controlled by the same entity, constituting concerted action, this would constitute an illegal acquisition of core U.S. semiconductor industrial assets. Given that the target companies' technology is on the Coordinating Committee for Multilateral Export Controls (COCOM) embargo list, this seriously crosses the line of national security."
The judge's gaze lingered for a moment on the shareholding percentages, accurate to two decimal places.
Faced with these undeniably anomalous data, any defense of "free market transactions" pales in comparison. These figures, which circumvent the red lines, are themselves an undisguised provocation.
Moreover, in the current political climate in Washington where people are extremely wary of foreign capital, any attempt to delay national security reviews is tantamount to voluntarily taking the blame for "selling out core industries" for Capitol Hill.
The judge listened quietly without saying a word, but slowly opened the drawer and took out a pre-prepared "Emergency Freezing and Penetration Inspection Order".
Pull out the pen.
The pen tip lands on the paper, and the ink quickly embeds itself into the paper's texture.
"Smack."
The court's seal was stamped heavily next to the signature.
"Thank you, Your Honor."
Arthur Vance said something hastily, then reached out and took the document, which carried the highest legal force. He raised his left wrist and glanced at the watch face.
It was exactly 9:00 AM.
This injunction needs to be sent through a dedicated line system from the federal court to the SEC North American Clearing House, located outside Washington, D.C. The entire physical process of administrative approval and system entry takes a full two hours.
Two hours later, the North American clearinghouse will disconnect the underlying network cable. Those one hundred Cayman Islands accounts will be completely locked, losing all trading and asset transfer permissions.
Arthur stuffed the documents into his briefcase, turned, and walked towards the door. His leather shoes clicked on the carpet, his steps more steady than when he arrived.
……
Midtown Manhattan, New York.
SA Investment's top-floor office area.
Outside the huge floor-to-ceiling windows, the Manhattan skyline was shrouded in a gloomy rain and mist.
On the large mahogany desk, the red internal secure telephone suddenly rang urgently.
Frank sat in his leather swivel chair and reached out his right hand to grab the receiver.
"Mr. Frank."
The receiver carried the deep voice of an informant from a lobbying group planted on K Street in Washington.
"The U.S. District Court for the District of Columbia has just issued an Emergency Freeze and Penetration Order for a group of offshore accounts under SA Investment. Arthur Vance received the order personally."
"There are 120 minutes left before the clearing center executes the freeze order."
A dial tone then sounded.
Frank slowly placed the receiver back into the plastic base.
"Click".
He took a deep breath, his lungs filling with the cold air from the air conditioner. A fine layer of cold sweat seeped from his palms, clinging to the armrests of the leather seat.
One hundred and twenty minutes.
In the conventional Wall Street hedging logic, the only solution to the impending asset freeze is to immediately sell stocks and withdraw funds back to untraceable Swiss banks.
However, the current market data does not support this operation.
Extreme ultraviolet light source laboratories and precision machine tool companies are typical examples of low-liquidity, asset-heavy companies. If hundreds of accounts simultaneously dump up to 30% of their shares into the market, the lack of buyers will cause an immediate market collapse. Stocks will plummet to their daily limit, and funds will be completely trapped at the limit down price, making a substantial withdrawal impossible.
Selling off means death.
Frank's mind raced, his gaze landing on the drawer with the brass latch on the edge of the desk.
The voice from Tokyo, the final command given in the transoceanic phone call weeks ago, now clearly resurfaces.
He did not hesitate.
Reach out, twist the brass latch, and pull open the drawer.
They retrieved a thick legal document, dozens of pages long, that had already been drafted by Manhattan's top securities lawyers.
Schedule 13D (Report on Changes in Major Shareholders' Equity).
The rules of the capital market are always ironic. In this arena built on information asymmetry, concealing the underlying equity structure, once discovered, will result in extremely severe penalties and asset confiscation from regulatory agencies. But at the same time, compliant "confession" also possesses the physical destructive power of a nuclear bomb.
The moment SA Investment voluntarily submitted this 13D form to the U.S. Securities and Exchange Commission.
Those one hundred seemingly insignificant shares, scattered across the Cayman Islands and the British Virgin Islands, each holding only 4.89% of the shares, will, legally speaking, instantly break through barriers and coalesce into a massive, absolute controlling stake exceeding 30%.
This compliant filing directly utilized the disclosure rules of the federal securities law to legally concentrate voting rights, thereby establishing the capital entity's irreversible controlling stake.
Frank laid the heavy 13D form flat on the table. He pulled over the fax machine in front of him and put the documents into the automatic feeder in order.
Fingers rapidly press keys on the numeric keypad.
Target ports: SEC Washington data receiving terminal, and the board secretariats of the five target companies in Ohio and California.
send.
Frank pressed the green start button.
"Sizzle—"
The fax machine's rollers began to spin, swallowing paper. A piercing electronic dial tone echoed through the office, accompanied by the sharp screeching of signal transmission.
Abandon all concealment.
Under the very noses of regulators across the United States, they proactively declared that these 100 offshore funds were "acting in concert" with each other.
The time was 9:15 a.m.
……
Cleveland, Ohio.
The top-floor conference room of the headquarters of a precision multi-axis machine tool manufacturing company.
The board meeting is in progress. The seven directors around the long table are engaged in a heated debate over budget cuts for the second half of the year.
"Drip, drip, drip."
The fax machine in the corner of the conference room suddenly started spitting out paper like crazy.
The board secretary frowned as he walked over and picked up the urgent document bearing the letterhead of the Manhattan Law Firm. His gaze swept over the first line of text, and his face instantly turned deathly pale.
"Gentlemen."
The secretary's trembling voice interrupted the argument at the conference table. He held the document in both hands and strode quickly to the chairman's side.
"We have just received a 13D equity change report."
The chairman took the document, his eyes quickly scanning the dense legal clauses.
"An offshore consortium called SA Investment announced that its affiliated funds, which it controls, have collectively acquired 31 percent of the company's outstanding shares. They...they have become the company's largest shareholder."
A deathly silence fell over the meeting room.
Thirty-one percent.
According to the company's articles of association, a shareholding exceeding 30% is sufficient to exercise veto power in any major resolution, and even has the absolute power to initiate an extraordinary general meeting of shareholders and reorganize the board of directors at any time.
The board members, who were just arguing heatedly about the budget cuts for the second half of the year, have now all lost their ability to speak.
Faced with the sudden report of changes in ownership, these executives were forced to stop their normal brain functioning and struggle to process an absurd yet legally valid objective fact: simply because of the arrival of a fax, the company they had just been giving orders to had, legally speaking, changed hands instantly.
Just then, the hands-free phone in the center of the conference table lit up with a red light.
The call was connected.
Good morning, board members.
Frank's voice, thick with a New York accent, came through the loudspeaker clearly.
"I am Frank, CEO of SA Investment. As the current controlling shareholder of your company, I am formally submitting an urgent motion to the board of directors on behalf of the largest shareholder."
The chairman's Adam's apple bobbed with difficulty as he looked at the unexpected document.
"Mr. Frank, this level of shareholding change requires our legal due diligence. Your current motion..."
"You don't have time to verify, Mr. Chairman."
Frank directly thwarted the opponent's delaying tactics.
"I hold 31 percent of the proxy voting rights. I now request that the board immediately vote on the Asia-Pacific Joint R&D and Exclusive Patent Licensing Agreement."
"This agreement will grant SA Group exclusive access to your company's most advanced multi-axis machine tool manufacturing patents in the Asia region, and will give it priority in purchasing all core equipment for the next five years."
"If the board refuses to approve the agreement," Frank's voice was cold and uncompromising, "I will immediately exercise my rights as a major shareholder and call an extraordinary general meeting to liquidate everyone present and restructure the entire board."
Faced with absolute capital dominance, any resistance based on corporate tradition is meaningless.
Frank timed it perfectly, anticipating the final window of opportunity before the SEC's freeze order took effect.
He used proxy voting rights to simultaneously issue mandatory resolutions at extreme ultraviolet light source laboratories in California and on the boards of directors of machine tool companies in Ohio.
With the newly acquired veto power, the local directors who had originally tried to obstruct the export of core technologies were instantly silenced.
"agree."
I second that.
Dry, hoarse voices echoed in different conference rooms.
The document was signed immediately.
Irreversible in legal terms.
While the SEC's order to cut off the internet connection was still going through cumbersome administrative procedures, SA Investment had already completely opened up the channels for the transmission of underlying technology through legal articles of incorporation. Those patents and equipment priority rights that were strictly blocked by the COCOM agreement crossed the Pacific Ocean through these expedited commercial contracts and landed steadily in that black box four stories underground in Tokyo.
at the same time.
Across several states in North America, similar commercial takeover procedures are also underway at the headquarters of four other target companies that possess core technologies in extreme ultraviolet light sources and precision multi-axis machine tools.
Forms bearing the SA Investment letterhead poured from the fax machines of various companies, while strongly worded overseas directives, delivered through the hands-free speakers on the conference table, cut off any avenues of retreat that local executives attempted to delay. The resulting massive controlling stake, simultaneously and indiscriminately, completed the legal mergers of these semiconductor hardware companies.
……
10:55 a.m.
Washington, D.C.
SEC North American Clearing House.
This is a heavily guarded, windowless building.
Inside the terminal room, hundreds of large server racks are neatly arranged, and the constant-temperature air conditioners emit a continuous low-frequency hum.
The two heavy, anti-static glass doors were roughly pushed open.
Arthur Vance, clutching the Emergency Freeze and Penetration Order stamped with the court's seal, strode into the terminal room.
He walked straight to the central control console and slammed the freeze order in front of the operator on duty.
"Immediately sever all trading permissions for these one hundred Cayman Islands accounts listed above. Lock down their funding channels. Immediately!"
The operator was startled by the sudden turn of events, but after glancing at Arthur's identification badge, he swallowed the profanity that was about to escape his lips. He quickly checked the court seal on the document and his hands flew across the keyboard.
A long string of instructions was input into the system.
On the central screen, the red cursors representing those one hundred accounts began to flash.
The operator adjusted his glasses, his eyes fixed on the green feedback characters that popped up on the screen.
He pressed the Enter key.
The image on the screen refreshes.
The operator turned his head and looked at Arthur Vance.
"Sir."
"The instruction has been executed. The trading permissions of these accounts have been completely frozen."
Arthur's tense shoulders were just about to relax.
"But..." The operator's gaze returned to the screen, "Just fifteen minutes ago, at 10:40 AM, the system received a unified Schedule 13D equity change report submitted by this batch of accounts."
"These accounts have been legally consolidated into a single entity. And, just ten minutes ago, they completed the exercise of their proxy voting rights."
The operator tapped a few times on the keyboard, bringing up the public filing system.
"The Exclusive Technology Licensing Confirmation Agreement of the relevant target company has been officially entered into force and filed in the SEC's EDGAR (Electronic Data Collection, Analysis and Retrieval System) public database."
The operator turned around.
"Although the account is frozen, legally speaking, what they wanted to take has already been transferred through a legitimate business contract."
The only sound in the terminal room was the hum of the large server racks running.
In this battlefield constructed by legal provisions and financial rules, being even one step behind means total defeat. The opposing party used the rules themselves to complete the perfect "self-destruction" and technical settlement before being shut down.
Arthur Vance stood in front of the constantly flickering cathode ray tube screen.
"...fxxk!"
After a long silence, he finally couldn't help but utter a curse.
His hand trembled as he raised it and clenched his fist, but then he remembered that everything here belonged to the government and was very expensive, so he could only swing it in the air in frustration, turn around, and helplessly rub his forehead.
He pressed his fingers firmly against his temples, closed his eyes, and took a deep breath of the cold air blowing from the constant-temperature air conditioner.
As he lowered his hand, his gaze fell on the side of the control panel.
There was a large dot matrix printer there. The machine had just stopped turning, and a long sheet of thermal paper was ejected from the output. On the paper, densely printed were the "Technology Licensing Confirmation Announcement" that SA Investment had just filed in compliance with regulations.
The written terms clearly state the established fact that the other party completed the transaction by complying with the disclosure rules of the Federal Securities Act.
Arthur stepped forward, extended his right hand, pinched the edge of the paper, and lifted it upwards.
"Sizzle."
The thermal paper was torn off.
He looked down at the impeccable legal clauses. His stiff fingers tightened slightly, pinching the edge of the paper into a deep crease.
His gaze swept over the authorization clauses, and his breathing became increasingly heavy. The nation's most advanced technological and industrial achievements had been brazenly uprooted by foreign capital through a mere game of legal compliance.
He gave it his all in this battle, exhausting all his administrative time and resources, but in the end, he was still completely outmaneuvered by the enemy and could do nothing in the face of this inevitable defeat.
He rudely crumpled the paper in his hand into a ball and threw it hard on the ground.
At least, he can afford to pay for this piece of paper.
It was also the only thing he could afford to lose.