ryethenovel Chapter 336 Beneath the White Water
Chapter 336 Beneath the White Water
(This is a long chapter of 5300 words. I won't break it up for better readability.)
October 23, 1990.
The study of the main residence of Saionji Temple.
The rain outside the window started in the afternoon and hasn't stopped yet.
The stone lanterns in the courtyard were blackened by the rain, and a string of fine water dripped from the eaves onto the moss with a soft sound.
Satsuki sat behind the desk.
On the table lay a copy of the Nikkei, and in the bottom right corner of page three was an inconspicuous news item—a medium-sized real estate company in the Kansai region had filed for debt restructuring.
The title was short and the word count was low. Sandwiched among several news articles about corporate layoffs, it looked like a black bean that had fallen into the sand.
She glanced at it twice and then folded the newspaper.
Fujita stood to the side and replaced the cup of black tea that had gone cold.
Today's tea is Assam; the deep red tea liquor swirls gently in the cup, exuding a rich aroma.
"Young Miss".
Footsteps came from outside the door.
Fujita turned around and opened the study door.
Endo walked in.
He was slightly damp from the rain, and his black overcoat was taken by Fujita, revealing a dark gray suit underneath.
The tie was tied very well, but the blue color was a bit darker than last week.
He was holding a thick, sealed report in his hands.
The cover is dark blue, with a white label in the upper right corner.
—A preliminary summary of the related fund flows of the Sumitomo Group.
Endo stopped in front of the desk and bowed slightly.
"Young Miss".
"sit."
Satsuki picked up her black tea and took a sip.
Fujita poured tea for Endo and then stepped back half a step to the side and behind Satsuki.
Endo did not drink it immediately.
He placed the thick report on the table, pressed his fingertips against the edge of the cover, and spoke in a very low voice.
"There's been some activity from Sumitomo."
Satsuki looked at him.
Endo turned to the first page.
"Over the past two weeks, the manager of the Sumitomo main family has been frequently contacting the directors of the Hakusui-kai."
"According to SIS intelligence, there were three locations where they met."
"These are a members-only ryokan in Kita Ward, Osaka; a private club in the former Kobe residential area; and an old inn in Akasaka, Tokyo."
He pushed an itinerary in front of Satsuki.
"The individuals contacted include the current presidents' secretaries of Sumitomo Metal, Sumitomo Chemical, and Sumitomo Electric Industries, as well as two retired advisors from Sumitomo Bank."
Satsuki glanced down at it.
The names on the itinerary were mostly written very briefly, only the surname and position were marked.
He remembered the time, place, and people he was with very detailed memories.
"Where is Sumitomo Yoshio?"
"He himself did not make a public appearance," Endo said, "but at one o'clock this afternoon, he sent someone with a message."
Endo paused for half a second.
He said the time had come. He hoped the Saionji family would keep their promise to Karuizawa.
The study fell silent.
The sound of rain falling outside the window is like a thin curtain.
Satsuki did not answer immediately.
She placed the teacup back on the saucer and gently stroked the stem with her fingertip.
How's Sumitomo Bank doing lately?
Endo's eyes flickered slightly.
He seemed to have anticipated that Satsuki would ask this question, so he quickly flipped to the middle of the report.
"Here's the problem."
He pulled out three pages of paper and spread them out.
"Sumitomo Bank's real estate financing business in the Kansai region has seen at least seven unusual extensions in the past six weeks."
"Loans that were originally due to be recovered by the end of September were rolled over twice. The extension period ranged from thirty to ninety days, the interest rate was not adjusted according to the risk, and the valuation of the collateral was not re-verified."
Satsuki's gaze lingered on the first line of amounts.
"Kansai real estate?"
"Yes."
Endo nodded.
"Several real estate companies in Osaka, Hyogo, and Nara have already experienced a break in their cash flow. According to normal risk control measures, they should have been added to the list of troubled creditors in September."
"But Sumitomo Bank still provided bridging funds."
He then handed over a diagram showing the flow of funds.
The paper was covered with arrows.
Several company names are enclosed in black boxes. A line runs back and forth between them, ultimately leading to the same name.
Ito Man.
Satsuki looked at those three words, her eyelashes drooping slightly.
Endo continued:
"Ito Man's trading, real estate, and related investment companies have all had multiple overlaps with the Kansai real estate fund flows."
"On the surface, it's trade settlement, land brokerage fees, and warehouse receipt financing, but the actual flow of funds back into the country is very chaotic."
"Several payments bypassed the regular approval process."
"Source of the signature..."
He paused for a moment.
"From the senior management office of Sumitomo Bank Osaka Main Branch."
Fujita stood to the side and slightly behind, his eyes looking somewhat somber.
The study was quiet for a few seconds.
A startled deer cried out from the courtyard.
The sound of the bamboo tube hitting the stone was brief and was quickly drowned out by the wind.
Endo pushed another excerpt over.
"Furthermore, unease has begun to emerge within the Sumitomo Group's manufacturing companies."
"The finance heads of Sumitomo Metal and Sumitomo Chemical expressed their concerns to the parent company through private channels last week. The wording was very tactful, but the meaning was very clear - they are afraid that if the bad debts on the bank side explode, the credit rating of the entire Sumitomo Group will be affected."
"Sumitomo Electric Industries is taking even bigger steps. Their managing director personally visited Yoshio's home the day before yesterday and stayed for forty minutes."
"Especially overseas financing. The cost of opening a US dollar letter of credit is already rising. If Sumitomo Bank runs into trouble, the industrial companies will be dragged down with it."
Satsuki did not speak.
She looked at the cash flow chart, her gaze shifting from Ito Man to Sumitomo Bank Osaka Main Store, and then back to the annotations of the Hakusuikai Board of Directors.
Ito Man.
Memories of a past life unfolded in my mind.
That should have been one of the abscesses left over from the bubble era.
A trading company gets caught up in real estate speculation, stock trading, and high-risk financing during the economic boom.
Bank executives believed that if they could hold on for a while longer, land prices would rebound and stock prices would recover, and the holes in their books could be covered by the next round of bubbles.
But the bubble burst.
The depreciation of land as collateral, inter-company lending among related companies, off-book funds, illegal loans, and the transfer of benefits—one line after another was pulled out.
In the end, the newspapers were filled with apologies, resignations, investigations, and responsibilities.
But it's still early.
Even if Satsuki's arrival affected many things, this event wouldn't have happened before 1991.
Ito Man has not yet made headlines.
The internal restructuring of Sumitomo Bank has not yet been completed.
The managers at Whitewater Club are still trying to buy time with extensions and bridging funds.
This is the cleanest entrance window.
Satsuki raised her head.
"Where's the memo from Karuizawa?"
Fujita immediately turned around and walked towards the safe against the wall in the study.
The keypad was turned, and the metal door opened.
A moment later, he took out a sealed file and handed it to Satsuki with both hands.
The file was sealed with sealing wax from the Saionji family.
Satsuki opened it and took out a few pages of paper.
The paper was thick, and the ink was clear.
At the bottom is Yoshio Sumitomo's signature and personal seal.
She read through them one by one.
—The Sumitomo family acknowledges the Saionji family's leading role in the purge of the Hakusuikai.
—Sumitomo Bank’s bad debt stabilization funds are processed via USD transfer, with interest and risk fees charged separately.
—When dealing with peripheral assets related to semiconductors, precision materials, and chemicals within the Sumitomo Group, the Saionji family has priority in making contact.
—The Sumitomo family, in a private capacity, opened up Kansai trade channels to Saionji Trading Company.
—If the family fails to regain its right to power, Sumitomo Yoshio will surrender a portion of the family trust's beneficial rights as collateral.
After reading it, Satsuki paused for a moment on the line "Priority Contact Rights".
Endo watched her movements and spoke.
"Young Miss, there's something I feel I need to mention."
"explain."
"The Sumitomo family has a much deeper history than those nouveau riche families in the Kanto region. Yoshio is here to beg us, but the manager of the Hakusui-kai is no pushover either."
"They've been operating in Osaka for forty years, and they have people everywhere in the Kansai region—banks, trading companies, and political circles."
Endo's voice didn't change tone, but his speech slowed down a beat.
"If we get too involved, there's a high chance we'll offend Sumitomo Bank, the Osaka business community, and the Kansai real estate circle at the same time."
He glanced at the cash flow chart on the table.
"Especially those signatures at the Osaka main store. If we run into those, they will definitely retaliate."
Satsuki's expression was calm.
She closed the memo.
"Endo, what do you think the Hakusui-kai are most afraid of right now?"
Endo looked up.
"First, they were afraid that the Special Investigation Department would get the inside information in advance."
"There's not much to say. Once the Special Investigation Department gets their hands on the invoice, they're finished."
Satsuki extended one finger.
"Secondly, they fear that the presidents of manufacturing companies will collectively side with their own companies."
"The White Water Association can also be considered a 'parliamentary system,' where the defection of manufacturing company presidents means their votes in the White Water Association are nullified."
The second finger falls.
"Third, we control the overseas dollar channels."
"That's our biggest advantage. We have US dollars, lots and lots of US dollars. And Sumitomo Bank needs US dollars."
The third finger gently taps the table.
"If these three things happen together, the White Water Association will be forced to go from actively delaying to passively explaining."
Endo did not speak.
He understood.
Just as Satsuki said before, this is not a simple rescue.
Once Saionji gets involved, it will extend its reach into Sumitomo's accounts, supply chain, and even the cracks in the board of directors.
The statement that the Sumitomo family has become a vassal of the Saionji family is not just a simple threat.
By the time the other party realizes what's happening, the Saionji family's mark will be left in key locations.
Satsuki picked up a pencil and wrote three lines on a blank notepad.
"The first floor."
She pushed the note to Endo.
"The SIS audit team was sent to Kansai under the pretext of 'assisting the Sumitomo main family in sorting out old accounts,' in order to get the Sumitomo main family to cooperate."
"First, we need to access Ito Man's trade records, the bank statements of Sumitomo Bank's real estate finance department, and the accounts of those three Kansai real estate shell companies."
"Don't rush to dig it all out."
"First, establish the original vouchers, signature chain, and fund return path."
"Especially those payments made by the senior secretarial office of the Osaka main store."
Endo picked up his pen and quickly took notes.
His pen paused for a moment.
"Nominally it's about settling old scores, but actually it's about securing a source of evidence."
"right."
Satsuki did not deny it.
"The second level is the differentiation among company presidents of industrial enterprises."
She looked towards the direction outside the study door.
"Is Father home tonight?"
Fujita answered in a low voice:
"The head of the household is expected to return to the main residence at six o'clock."
"Please ask him to use his status as a long-standing friend of the powerful families to send private dinner invitations to the presidents of Sumitomo Metal, Sumitomo Chemical, and Sumitomo Electric Industries."
"The invitations will be sent out in the name of the Saionji main family. Let them know that this is the head of the family personally making the invitation, so it carries significant weight."
Satsuki's tone was not fast.
"Make the topic a little gentler."
"Let's call it a 'Industry Credit Protection' negotiation meeting."
When Endo heard those words, a knowing glint flashed in his eyes.
This theme sounds like elders getting together behind closed doors for tea and reminiscing.
But every manufacturing company president who receives an invitation understands.
This is to force them to choose sides before the banks' credit collapses.
"The third floor."
Satsuki picked up the teacup, but didn't drink it.
"Saionji Trading Company has entered the Kansai region."
Endo's expression turned slightly serious.
Are the people from Saionji Trading Company, who have only been transferred there for a short time, already going to get involved in an incident of this magnitude?
...Well, it's alright. The personnel transferred here are the cream of the crop, so all we can do now is ask them to do their best.
Satsuki continued:
"Saionji Trading Co., Ltd. needs to set up a temporary office in Osaka within three days."
"Nominally, it is to assist Sumitomo Group companies in handling foreign trade settlements and import letters of credit."
"The actual work involves figuring out the overseas settlement channels for the entire Sumitomo Group supply chain."
"Get SIS to cooperate with their investigation—who is using which bank's letter of credit, which flight route they are taking, whether the currency is US dollars or German marks, and whether there are any third-party agents involved. Create a complete file."
She looked up at Endo.
"The Sumitomo Bank brand isn't in a rush right now."
"The time is not right."
"Touching the banks now would alarm the Ministry of Finance, attract the attention of all the zaibatsu in Japan, and completely alienate the Sumitomo family."
"What I'm looking for now are peripheral companies in the Sumitomo Group's semiconductor materials, precision metals, specialty chemicals, and electrical engineering supply chains."
Endo's Adam's apple bobbed slightly.
He looked down at the words he had written down.
Sumitomo Bank is the ultimate goal.
but not now.
The real prey currently on the table are the peripheral businesses of the Sumitomo Group that are tied to bank credit.
They have the technology, the personnel, and the supply chain location.
Once bad bank debts affect the entire group, the presidents of these companies will be more eager than anyone else to find new financial refuge.
All the Saionji family needs to do is offer them an umbrella when they are most afraid.
Once the entire industrial chain is in our hands, once the dollar channel is completely controlled, once the Sumitomo Group has accumulated enough favors—
We'll discuss banking licenses then.
Endo remained silent for a few seconds.
"Sumitomo Yoshio might change his mind."
Satsuki looked at him.
"After he uses our power to subdue the White Water Society, he may not be willing to fulfill the subsequent conditions."
Endo was very direct.
"The Sumitomo family is, after all, the Sumitomo family. They bowed their heads because they had no other choice. Once they return to the forefront, they may not even acknowledge this memorandum."
Satsuki smiled softly.
The smile was faint, like the surface of black tea touched by candlelight.
"Of course he can back out."
She put the Karuizawa memo back into the dossier.
"But by then, the files will be in our hands."
"The funding channels are in our hands."
"We have the list of company presidents."
"We also have US dollar letters of credit."
Satsuki raised her eyes.
"If he wants to go back on his word, he should take all these things back from the Saionji family one by one."
Endo lowered his head.
"clear."
Fujita then stepped forward and placed a business card on the edge of the table.
"Young lady, this is a business card from Sumitomo."
Satsuki picked it up and glanced at it.
The business card has an old-fashioned feel, with thick paper and restrained font.
Manager of the Sumitomo family headquarters.
Masahiro Kawase.
Satsuki remembers this name.
That night in Karuizawa, when Yoshio Sumitomo and his son went up the mountain, this man was in their convoy.
He wears a black umbrella and a gray kimono jacket, and always lowers his head to check the other person's reaction before speaking.
"Are you in Tokyo?"
"Yes," Fujita said. "An old inn in Akasaka. They've been waiting for three hours."
"He said that if the young lady was willing to see him, he could come immediately."
Satsuki placed the business card back on the table.
"not see."
Endo looked up.
Satsuki looked at him.
"you go."
"Give him a word."
Endo closed his notebook, waiting for the next installment.
Satsuki's voice was very soft.
"The Saionji Family Association is assisting the Sumitomo family in restoring the glory of the Chinese community."
Fujita's eyelids drooped slightly.
This statement is so polite that it's almost impossible to find fault with it.
Endo, however, sensed the underlying meaning.
Assisting the Sumitomo family.
It is not to assist Sumitomo Bank.
It was not an assistance to the White Water Society.
Satsuki continued:
"The list of members for the Kansai Special Audit Team will be finalized tonight."
"Recruit people from SIS, legal, and commercial departments."
"The head of the audit team must understand bank accounts, and the deputy must understand trade settlement."
Endo quickly wrote it down.
"Fujita."
"exist."
"Transfer people from Tangdao Island tomorrow morning. Keep it low-key, keep the number of people small, and keep their resumes clean."
"Yes."
"Saionji Trading's temporary office in Osaka must be put up for business within three days."
"Don't choose a building that's too conspicuous. It's best to be near Yodoyabashi, so that it's easy to contact banks and trading companies."
Endo nodded.
"I'll make the arrangements."
"Father's invitation was issued in the name of our family."
Satsuki glanced at the clock on the wall.
"Deliver the list and draft invitations to Father's study before 5:30."
"The dinner is scheduled for this Friday."
Endo closed his notebook.
"clear."
……
6:15.
When Shuichi returned to the main house, the rain had subsided.
Two black umbrellas have appeared on the umbrella rack in the entryway, their tips still dripping water.
Old Fujita was waiting for him at the end of the corridor.
"Master, the young lady is in the study."
Xiu took off his coat and nodded.
"What about Sumitomo?"
Fujita didn't say much.
"Yes."
When Shuichi entered the study, Satsuki was placing several invitation drafts on the table.
He glanced at the title.
Industry credit protection private banquet.
Shuichi sat down in the chair and picked up one of the cards.
Sumitomo Metal Industries, Sumitomo Chemicals, Sumitomo Electric Industries.
"Um."
Satsuki pushed the list over.
"They've started to worry that bad bank loans will drag down the credit of the real economy. It's most appropriate for Father to step in now."
Xiu glanced at his daughter.
"What do you want me to do?"
"It was just an invitation for them to have a meal."
Satsuki smiled.
"Let's talk about letters of credit, overseas financing, and how the manufacturing industry can maintain its creditworthiness in this era."
Looking at her gentle and proper expression, Shuichi suddenly sighed.
"You silly child."
He picked up his pen and wrote down a few more polite phrases next to the draft invitation.
"The Sumitomo family is an old friend, so we can't be too sharp in public."
"That's why we need Father."
Satsuki answered quickly.
Shuichi was somewhat helpless after being coaxed by her words, but the corners of his mouth still turned up slightly.
"understood."
He lowered his head and revised the invitation.
"I'll arrange the dinner on Friday night."
"Thank you, Father."
……
8:40 PM.
Endo left the main house.
The car lights outside the courtyard flashed for a moment, then quickly disappeared into the rain and mist.
The study fell silent again.
Fujita took away the empty teacup and replaced it with a small table lamp.
Warm yellow light fell on the table.
Satsuki sat alone behind her desk and unfolded the cash flow chart left by Endo.
Ito Man.
Sumitomo Bank Osaka Main Store.
White Water Association Council.
The three names are separated by several complex arrows, intertwined with each other.
Satsuki picked up the red pen.
The pen tip lingered on the paper for two seconds.
Then, she circled the three names one by one.
The red ink was very fresh, and it shone slightly on the paper.
She looked at the picture and then flipped to the Karuizawa memo next to it.
The rain outside the window has stopped.
The last drop of water fell from the eaves and landed in the stone bowl with a very soft sound.
Satsuki wrote four characters in the corner of the cash flow diagram.
The Kansai region is starting.