Reborn in Tokyo: From Heiress to Global Tycoon

Chapter 341 The Non-existent Fact

October 30, 1990. Tuesday.

Osaka, Itoman Trading Co., Ltd.

The light outside the window was leaden gray, and the sky over the Dojima River was very low.

Endo stood in front of the whiteboard, drawing a line under the words "Friday Afternoon" with a marker.

Tadokoro sat on the left side of the long table, with three folders of different colors spread out in front of him.

Yellow represents Ito Man's trade contract ledger, blue represents the warehouse receipt financing number sequence, and white represents the cross-comparison table compiled by SIS itself.

"To summarize," Endo turned around, his pen still capped. "From last Friday to this morning, we've confirmed a few facts."

His fingers moved across the whiteboard.

"First, in Ito Man's trade contract ledger for the fourth quarter of 1989, there were eleven prepayment records totaling more than 500 million yen. And all eleven of these records pointed to three shell companies in the Kansai region."

"Secondly, in the corresponding warehouse receipt number sequence, there are five empty numbers: WH-8912 to WH-8944. These five empty numbers happen to correspond to the three largest prepayments."

"Third. The deposit transfer vouchers show that all three sums of money ultimately went into the third escrow account of Sumitomo Bank Osaka Head Office."

He paused for a moment and looked at Tadokoro.

"Did the original contract arrive this morning?"

Tian shook his head.

"Not yet. Itoh Man insists on the new 'departmental hierarchical filing system.' The application form from the Trade Management Department needs the signature of the Trade Section Chief, who is in a meeting at the Osaka Chamber of Commerce and Industry today. The earliest we can get it is 4 PM."

Endo didn't press the matter. He walked to the window, where the gap in the Venetian blinds was narrower than yesterday—only half a finger's width.

Hmph, they're acting out of guilt.

"But we found something new." Endo's silhouette cast a shadow at the window. "Tadokoro, open that white folder."

Tadokoro opened the white folder, pulled out a page, and placed it in the center of the desktop.

It was a hand-drawn chart, with time on the horizontal axis and the flow of funds on the vertical axis. Several lines of different colors intertwined and eventually converged to the same destination.

"This is an analysis of the sources of all 'overseas receipts' from Ito Man in the fourth quarter," Tadokoro said in a low voice. "After categorizing them by company name, we discovered a pattern."

His finger touched a red dot in the upper right corner of the chart.

"For all trade contracts entered after 3 p.m. on Friday, the corresponding 'overseas remittances' are all registered in Kitahama, Chuo-ku, Osaka City."

Endo walked back to the table.

"Kitahama...that was the area with the highest concentration of Kansai financial shell companies during the bubble economy."

"What is the scope of business for these payment collection companies?"

Tadokoro turned to the next page.

"Three are real estate agencies, two are microfinance companies, and the other one... its business description says 'information consulting services'."

The meeting room fell silent.

A crow cawed outside the window, coming from across the river, its call trailing off. (There are so many crows in Osaka!)

Endo placed the marker on the table, finally putting the cap back on.

"So, this is how the funds flowed." He didn't use a whiteboard; he simply drew an invisible line on the table with his fingertip. "The shell company transferred the money into Ito Man's account under the guise of 'overseas buyer paying the final payment.'"

"Ito Man recorded this money as a trade payment, corresponding to a supplementary contract. Then, based on this contract, he applied for warehouse receipt financing from Sumitomo Bank."

"The bank approved it, and the margin was deposited into the escrow account. But the corresponding warehouse receipt—" he paused, "is empty. There's no actual record of goods being stored there." (A phenomenon from the bubble era: all the paperwork is real, but there are no physical goods.)

Tadokoro continued, "Port records show that the bill of lading date and the warehousing date for those contracts differed by more than four months. However, in Ito Man's ledger, the warehousing and payment dates were the same."

"On the same day," Endo repeated the word.

He turned to look at the line on the whiteboard that read "Friday Afternoon".

"All the unusual activity occurred after 3 p.m. on Friday. This timing is very sensitive."

Tadokoro nodded.

"The deadline for clearing large transactions at banks is 3 p.m. Transaction records entered after 3 p.m. will not enter the central bank's clearing system until the following Monday. There is a 48-hour time difference in between."

"A 48-hour time difference... is enough to transfer a sum of money from a shell company account, through two or three intermediary accounts, and finally into 'overseas remittances'."

As Endo spoke, he returned to the window.

Under the leaden sky, the surface of the Dojima River gleamed with a dull light.

"The problem now is—"

Before he could finish speaking, footsteps echoed down the corridor.

The footsteps were heavy, the heels of leather shoes clicking on the floor. A moment later, the door was pushed open from the outside.

Mei Chang stood at the entrance.

Today his suit was dark gray, but he wore a navy blue tie with very fine silver twill weave. He wasn't holding the piece of paper with the four lines printed on it, but his gaze was even more piercing than yesterday.

He rested his hand on the door frame and stood there for two seconds before speaking.

"Mr. Endo, may I have another five minutes of your time?"

Although he adopted a posture of seeking opinions, he did not actually make any request.

Endo turned around and didn't pursue his rudeness.

"please."

Mei walked in, but did not sit down.

His gaze swept across the documents spread out on the table, finally settling on the white chart.

His pupils contracted slightly, but his expression remained unchanged.

"Regarding the scope of your current audit," Mei Ba emphasized each word. "We need to provide further clarification."

Endo stood still, not moving. "Please speak."

Mei Chang took a piece of paper out of his inner bag.

"According to Article 7, Paragraph 3 of the Comprehensive Credit Agreement signed between our bank and Ito Man Corporation—"

"Documents concerning bank credit review, escrow account operation, and letter of credit number management fall within the scope of confidential information as stipulated in the agreement. Without the creditor's written consent, the debtor and its affiliated auditors may not copy, extract, or disseminate them in any form."

After he finished reading, he put the paper down.

"This supplementary comment applies to all documents related to warehouse receipt financing and margin transfer that you are currently reviewing."

The meeting room was quiet. Tadokoro's pen hovered in mid-air. Nagai kept his head down, his fingers tracing the edge of his notebook.

Endo looked at the plum field.

three seconds.

Five seconds.

Then he tilted his head slightly, his gaze falling on the paper in Mei Chang's hand.

"Mr. Umeba," Endo's voice was soft. "The clause you just cited is the agreement between Ito Man and Sumitomo Bank. Is that correct?"

Mei Chang nodded.

"Yes. This is a confidentiality agreement between the creditor and debtor."

"Then—" Endo put his hands in his suit pockets, "the parties bound by this agreement should be Ito Man Trading Co., Ltd., and the legal representative who signed the agreement on behalf of Ito Man."

He paused for a moment.

"We are the third party commissioned by the Sumitomo family to audit Ito Man. Our authorization letter was issued by Mr. Sumitomo Yoshio."

"The scope of authorization is to 'verify the trade settlements, warehouse receipt financing, overseas accounts receivable and transactions with the company's asset management account of Itoman Corporation and its affiliated companies'."

Endo's gaze returned to Umeba's face.

"The confidentiality clause you cited binds Ito Man, not the Sumitomo main family, nor the auditors appointed by the main family."

Mei Chang's Adam's apple bobbed slightly. His lips tightened, and his jawline formed a stiff curve.

"Mr. Endo." His voice dropped half an octave. "As the creditor, the bank has a responsibility to protect the complete information related to our credit decisions from being leaked. The documents you are currently reviewing, while formally belonging to Ito Man, are deeply intertwined with the bank's credit granting process."

"Once this information leaks out of this conference room in any form—" he paused, "the bank will be unable to assess the potential risk of data breaches."

Endo didn't reply. He walked to the table and picked up the white chart.

In the lower right corner of the chart, a line of small red text reads: "Source of payment: Beibang Shell Company Cluster".

He held the chart up to a height visible from the plum field.

"Mr. Umeba. All the data on this chart comes from Ito Man's own trade contract ledgers, bank transfer vouchers, and public records from the Japan Marine Cargo Insurance Association."

Endo put the chart back on the desktop.

"Not a single piece of data was retrieved from Sumitomo Bank's internal system."

Mei Chang narrowed his eyes slightly.

"Ito Man's own transfer receipts show the recipient's name and account number," Endo continued, speaking a fraction slower than before. "This information is in Ito Man's finance department's filing cabinet. We don't need Sumitomo Bank's permission to access these documents."

He paused for a moment.

"If Sumitomo Bank believes that the documents in Ito Man's finance department filing cabinet also constitute confidential bank information—" Endo slightly raised his chin, "then please submit a written objection to our audit team as a creditor."

"The objection letter should state: Your bank claims that the trade documents held internally by the debtor (Ito Man) contain confidential information that the bank cannot audit."

Mei Chang's expression changed.

His fingers gripped the handwritten paper tightly, the edges of the paper curling up slightly at his knuckles.

He dared not write.

Once that sentence was written down, it was tantamount to publicly admitting that Sumitomo Bank was deeply involved in Ito Man's trade structure, to the point that even the debtor's own trade documents became the bank's secret.

That's a bomb that could destroy the entire credit system.

The meeting room door was pushed open again.

Masahiro Kawase stood at the door.

He was holding a document in his hand; the paper was washi paper, and the edges were a bit rough.

"Mr. Umeba, excuse me."

Umeba turned around. His shoulders stiffened the moment he saw Kawase.

Kawase didn't look at him. He walked up to Endo, bowed slightly, and handed him the washi paper document.

"Mr. Endo, this is a supplementary authorization from the Sumitomo Group to the audit team's authority." His voice was calm. "The scope of the authorization includes: to verify the authenticity of the debtor's trade, the audit team has the right to access all original or copy of trade documents kept internally by the debtor, and has the right to independently analyze and cross-verify the content of the documents."

He paused for a moment.

"This authorization is not contingent upon the creditor's consent."

This was said to Meichang.

Mei Chang stood still, the paper in his hand hanging at his side, his fist clenched tightly.

Endo took the washi paper document and unfolded it.

The paper bears the personal seal of Yoshio Sumitomo, the red ink having dried completely, with the edges slightly blurred.

After reading it, he closed the document.

"Thank you, Mr. Kawase."

Kawase nodded. Then he turned to Umeba.

"Mr. Umeba." His tone remained calm. "Article 7, Section 3 of the Comprehensive Credit Agreement you just mentioned has been reviewed again by our legal department this morning."

Mei Chang raised his head.

"This clause is indeed binding on the debtor (Ito Man) and its affiliates," Kawase said. "It does not apply to the independent auditors commissioned by the company. This supplementary opinion you have here—" His gaze fell on the paper that Umeba had nearly crushed, "If you continue to insist, it may be necessary to submit a formal legal opinion to the company's board of directors."

"The opinion letter needs to demonstrate why trade documents kept internally by the debtor are included in the bank's confidentiality scope."

Mei Chang's breathing became heavier. His chest rose and fell twice before he managed to calm himself down.

"...I will relay this to the head office's compliance department." His voice was harsh, as if it were being squeezed out from between his teeth.

"No need." Kawase's tone softened slightly. "The main legal department has already sent a direct letter to the compliance department of the Osaka main store. Regarding the definition of audit authority, it shall be based on the authorization of the main store."

Mei Chang didn't say anything more. He folded the handwritten paper and put it into his inner bag.

Then he gave Endo a deep look.

"Mr. Endo, you... and that young lady, are both exceptionally talented."

"But this is Osaka, not Tokyo."

After saying that, he immediately turned around, tapped his heels twice on the floor, opened the door, and went out.

After the door closed, the conference room was silent for a full ten seconds.

Tadokoro was the first to move.

He let out a long breath and his shoulders relaxed.

"He's gone," Nagai said softly.

Endo didn't reply. He walked to the window and pulled the blinds open a finger's width further—now he could see half a window on the third floor of the Sumitomo Bank Osaka headquarters across the street.

"Continue," he said.

Tadokoro immediately opened the white folder. "Based on the data we have so far, we can deduce the complete financial chain."

He walked to the whiteboard and picked up a marker.

"Step 1: Kansai real estate shell company A, under the guise of 'paying the final payment on behalf of the overseas buyer,' transferred 100 million yen to Ito Man. Time: Friday afternoon at 3:20 pm."

"Step 2: At 3:45 PM on Friday, Ito Man's finance department entered this money into the trade contract ledger, corresponding to contract number CT-890712. The contract signing date was updated to October 12th."

"Step 3: At 4:10 PM on Friday, Ito Man applied for warehouse receipt financing of 30 million yen from Sumitomo Bank Osaka Head Office based on contract CT-890712. The margin of 9 million yen was transferred to a third escrow account."

"Step 4: The central bank's clearing system will begin processing the transfer on Monday morning. The funds will be cleared by noon on Monday and transferred from Ito Man's account to the escrow account."

"Step 5: The corresponding warehouse receipt number is WH-8919—this number exists in the ledger. However, the Osaka Port bonded warehouse's warehousing records show that the goods corresponding to this number were received on November 3rd."

Endo stood by the window, his back to the whiteboard.

"November 3rd," he said. "A whole week later than the payment date."

"Furthermore," Tadokoro added, "the goods description on the warehousing record is 'industrial chemical reagents,' but the goods listed in contract CT-890712 are 'precision instrument parts.'"

"The product doesn't match the description," Endo said.

"The goods don't match the description." Tadokoro nodded. "The letter of credit number exists, but the actual trade didn't happen."

He put down the marker and turned to face Endo.

"Clearly, this couldn't be an accounting error. What they did was create a closed-loop financing letter of credit structure."

"Using real estate funds, packaging them as trade settlements, and then using fake warehouse receipts to extract real cash from banks."

Endo turned around.

His face was expressionless. But Tadokoro noticed that the tip of his right index finger tapped three times lightly on the seam of his trousers.

"Take this analysis and turn it into a formal report," Endo said.

Tadokoro picked up a pen. "Title?"

Endo walked back to the table and slowly put the white chart into the briefcase.

"The 'Analysis Report on Abnormal Trade Finance in the Fourth Quarter of 1989 by Ito Mansho Corporation'," he said.

Then he paused for a beat.

"Subheading: Friday afternoon update on transaction chain anomalies: cross-contamination between trade finance and real estate cash collection."

The briefcase lock clicked shut. Endo straightened up and grasped the briefcase handle in his palm.

"The last line," he said softly.

"The letter of credit number is genuine."

"The trade fact does not exist."