Chapter 07 Part 03 - Get Rich (1/2)
**Chapter 07 Part 03 – Sidestory - Get Rich**
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Based on House ZiChuan’s regular army manning quota: Ten men form a squad, fifty men form a platoon and five hundred men form a battalion. A Cavalry division had ten battalions, total five thousand strong, while an Infantry division had twenty battalions, total ten thousand strong.
“Xiu’s Company” only had a bit over eight thousand Cavalries, which were barely enough to fill the ranks of two Cavalry divisions, but Luo Jie, Chang Chuan, Bai Chuan all complained, saying they were Banner Masters. Given their rank, they should at least command a whole division each.
ZiChuan Xiu had no choice, so he reformed the Xiu’s Company into three divisions: Three thousand men in the first, under the command of Luo Jie. Three thousand men in the second, under the command of Chang Chuan; Finally, Bai Chuan was given the command of the third division, which answered directly to ZiChuan Xiu.
Everyone was happy with the outcome, but ZiChuan Xiu suddenly realized, that after all this time, he still only had three Officers under his command. Nothing had changed.
……
During Xiu’s Company’s first Council of War, ZiChuan Xiu’s words had left everyone flabbergasted.
Bai Chuan’s jaw dropped in surprise: ”Sir, what did you just say? What... what... was that?”
ZiChuan Xiu answered understandingly: ”Well. I said we are going to set up Xiu's Limited Company by Shares.
Luo Jie: ”Sir, but what is.... that erm, Shares?
Chang Chuan: ”Shares? Luo Jie, you idiot! Sir Xiu was clearly talking about Beers! Wait, why are we limited by beers? I still don't understand, Sir!”
”So called Limited Company by Shares, is a way to organize the capital for modern enterprises, where the company's a.s.sets are divided into equal shares. In such companies, the liability for the company's debt is limited by the total a.s.sets of the company, and the shareholders shares that limited liability for the debt based on the amount of shares they are holding. The profits distribution is determined based on the number of shares, after the deduction of the mandatory statutory reserve and the public welfare fund. So for each share you hold, you get one share of the profit... Get it?”
The trio spoke in unison: ”Not at all!”
ZiChuan Xiu sighed: ”Fine, I will make it very simple for you. It is basically a scam! First you come up with a catchy name, (like Xiu's International Unlimited Investment Group Co.) think of an attractive project, (like we found a hidden treasure trove in the Far East, all we need is the money to begin the excavation) make some false promises to lure them in, (like if you pay me one now I pay you ten back in a year) and finally you declare bankruptcy. (Start running the moment you get the money) That... my friends, is called a Limited Company by Shares!”
It was as if everyone suddenly had an epiphany: ”What didn't just you say so from the start? Isn't that what you have been doing all along?”
Only Chang Chuan was still not convinced: ”Sir, we are in the middle of a war-zone, where are we supposed to find idiots with money? All we have here are refugees. Even if we strip them bare we won't find a single coin on them.”
ZiChuan Xiu smiled nefariously: ”Worry not. I have found them already! Did you not notice the large group of caravans following us? Food is the least of our worries!”
Whenever Xiu's Company arrived to a new town, ZiChuan Xiu would make it his priority to get in touch with the local merchant guilds, and preach his truth to them: The Civil War in the Far East is a great opportunity for all of us to get rich! Just think about it, the Civil War has been going on for months. Most of the supply of salt, food, medicine and daily necessities all come from the core areas of House ZiChuan. The demands must be going through the roof by now. At the same time, the Far East produces large amount of gold, diamonds, magical crystals and gems. Due to the Civil War, all the trades have stopped completely, leaving large amount of s.h.i.+nies piling up in the storage... Now consider this, what if you are the first group of merchants to start the trade again in the Far East. How profitable would that be...?
The merchants were practically salivating at the potential prospect, but they quickly regained their wits: The Far East is in a war-zone. Forget about the Rebel-controlled provinces, even in House ZiChuan-controlled provinces, bandits and thieves are everywhere. Without a large armed escort providing them protection to cross the borders, what chance do they have?
ZiChuan Xiu laughed candidly: ”You are in luck. I, Sir ZiChuan Xiu, am the Commander of House ZiChuan's finest, the Xiu's Company! With three divisions of elite Cavalries at my disposal, they are more than enough to secure your cargo's safety! (He of course didn't mention how many men he had in each division!)
The merchants asked: Xiu's Company? Never heard of them. Who are they? I hope they are not one of those newly recruited militia army. They are worthless... ZiChuan Xiu denied angrily: Of course not! Xiu's Company has a long and glorious history. They are disciplined, loyal and very capable, and as I said, they are one of House ZiChuan's finest! Anyways, it is ok if you haven't heard of it, but you should have at least heard of Sir Stirling's ”Central Army Death Guards” and Sir Di Lin's ”Iron Constables”, right?
The merchants looked at each other and nodded in agreement: Sir Stirling and Sir Di Lin were both famous generals of our generation. We've obviously heard of their names and even know their stories! But Sir ZiChuan Xiu... who are you...?
That was the signal for ZiChuan Xiu to pull out the portrait showing him, Stirling and Di Lin all posing together, the one with their signatures on the back: Everyone look! If you are not blind, you should be able to tell who they are right? They say a man is defined by whom he call his friends! Naturally, the one in the same portrait of two famous generals has to be a famous general as well! You all know their character, integrity and work ethics. Putting your faith and your wealth in the hands of a famous general of the same calibre with Sir Stirling and Sir Di Lin... What do you have to worry about?
With that little trick, ZiChuan Xiu exploited the greedy hearts of countless merchants along the way and made them willingly invest in his little venture. Some even came along themselves in caravans full of cargos. (Naturally, they needed to pay extra for protection.) ZiChuan Xiu thought, It was time to let the merchants in on some of the details, or in other words, let them have a taste of the potential profit...
……
Amid the sound of fireworks, the proposal was pa.s.sed unanimously by Xiu’s Company’s first Council of War, and thus, Xiu’s International Unlimited Investment Group Co. was officially launched!
The Company’s new articles of a.s.sociation declared: “All Xiu’s Company’s soldiers, automatically receives a share of the company. Squad leader gets two, Platoon leader gets five and Battalion leaders gets ten. The profit will be distributed at month’s end based on the equity and the numbers of the shares.
ZiChuan Xiu told the merchants: “To conquer the vast markets of the Far Eastern Region, to overcome the criteria of its various market segments, and to adapt to the complex s.h.i.+fting market conditions, we must adapt ourselves to the market oriented economy, reducing our exposure to risk, increasing our profitability, encouraging scientific and technological innovations, and optimizing our industrial and a.s.set structure. Industrialization, Globalization and Diversification, those are the keys to our success!”
The merchant were amazed by Sir ZiChuan Xiu’s business ac.u.men as they praised him for his wisdom, foresight, vision and being a pioneer in market development.
Luo Jie was totally confused, he hurriedly asked ZiChuan Xiu: “Sir, what did you just tell them?”
ZiChuan Xiu replied: “It basically meant that one scam isn’t enough, we need to lay down more traps! Besides, those fireworks were crazy expensive, all that for only one company seems such a waste!”
And so, on the very same day, they hurriedly founded Luo Jie’s Cereal Ltd., Bai Chuan’s Cosmetics Ltd., Chang Chuan’s Diamond Acquisition Ltd., Luo Jie’s Textile Ltd., Chang Chuan’s Investment Banking, Bai Chuan’s Technology Consulting Firm, Bai Chuan’s Import and Export Trade Ltd., Chang Chuan’s Finance Ltd., Luo Jie’s Trust Fund Ltd… A total of fifty-six companies!
There were so many billboards for all the companies, they had covered every door and wall in Xiu’s Company’s base camp. In the end they ran out of s.p.a.ce, they had to put the billboard of “Luo Jie’s Far Eastern Seafood Ltd” over at the male bathroom, and “Bai Chuan’s Perfume Ltd” over at the female bathroom.
Luo Jie became the General Manager, Legal Representative, Chairman and the Executive Officer of twenty-one companies… Chang Chuan took charge of nineteen companies and Bai Chuan had sixteen companies under her name. Everyone referred each other as Chairman that day, looking incredibly happy.
Even though ZiChuan Xiu didn’t took any position in any of the companies, he had shares in every one of them, varying from hundred percent to fifty one percent.
The Beastmen grew envious of the situation. They quickly sent Dren to negotiate, demanding to have a company or two of their own. ZiChuan Xiu immediately satisfied them, launching “Alibaba and Forty Thieves” Ltd., and “Sai’s Angels” Ltd. on the spot. He even gave them the exclusive dealers.h.i.+p agreement of Xiu’s Company Ltd. in their home town, the province of Wargo… Naturally, the same rules applied, ZiChuan Xiu held seventy percent of the company shares, leaving thirty percent for the Beastmen!
All of a sudden the Beastmen were satisfied as they left in smiles holding a few billboards of their own. Now they really had something to brag about! In the history of their entire village, they had never seen things like that, being a Chairman was like having your name on the ancestral halls… Even though they never quite understood what Ltd. stood for and what being a Chairman entailed…
All they cared about was, how jealous the idiots from the nearby villages would be when they show them the billboards!
……
“Sir, can you repeat once more what you just said?”
“Sure, it is pretty simple. Bai Chuan. The inter-relations.h.i.+ps of our companies are as followed: Both Luo Jie’s Textile Ltd. and Bai Chuan’s Dress Ltd. hold forty-seven percent and thirty-eight percent of the shares from Luo Jie’s Trade Ltd. respectively. And through equity financing, Luo Jie’s Textile has absorbed ten thousand shares from Luo Jie’s Far Eastern Food Ltd. Meanwhile, Chang Chuan’s Investment Banking Ltd. has acquired the majority shares of both of those companies through stock swap. However, Luo Jie’s Trust Fund Ltd. is only a sh.e.l.l company. Its only purpose is to deal with the taxes. It is mostly financed by Luo Jie’s Trade Ltd. but all the taxes are paid through Chang Chuan’s Investment Banking Ltd… So, that sounds simple right? I’m sure you get it now!”