Yan Jiehe, The Last Madman

First, preface:

"The last madman" - this may be a controversial label.

The reason why we use this topic is based on several levels of consideration: Yan Jiehe has his own unique annotation on "Crazy". rule The highest level of "Crazy" is to achieve "violate the rules, do not violate the law, do not violate the law, and never commit crimes". This realm has been achieved. Even though Lang Xianping was once criticized as "the first big crocodile who encroaches on state assets", he did not mind. The real "mad man" sign is not a temporary display of arrogant power, but a crazying to the end.

On the other hand, Yan Jiehe is unique and has made tremendous progress. Success "BT+ zero assets acquisition of state assets" government and business The mode, and the vigorous business he is now engaged in "the first five business schools in the world in 15 years", I am afraid there is no other way out besides him.

Two, Prequel

Huaian, Jiangsu, is called Huaiyin in ancient times. It is located in the eastern part of the Yangtze Huaihe plain. The Grande Canale, Hangzhou, and ancient Huaihe meet here. In history, there were celebrities such as Hou Hanxin, Wu Chengen, Liu E, Huaiyin, and so on. This is also the hometown of Zhou Enlai, a great modern man.

Yan Jiehe was born in 1960, ranking nine. When Yan mother was 44 years old, his family called him "44". The mother lacked milk, and he grew up eating the milk of his elder sister or sister-in-law.

 

In 1966, influenced by the cultural revolution, Yan family moved to the countryside. "The great leap forward of 1958 and the dead people in 1960 are everywhere. We were born in the age of starvation, growing up in times of turmoil, and adults in an open era". In 2005, as a black horse tycoon participated in the recording of a television program, Yan Jiehe recalled the poverty of childhood. He said: when he was young, his family was too poor to buy cloth. He wore shoes made of straw and waste sacks in the country. If the shoes are wet and rotten, they will barefoot whenever it rains.

Adult Yan Jiehe seized the opportunity to resume the college entrance examination in 1977, entered the local normal college, and became a Chinese teacher in middle school after graduation.

In accepting our interview, he had a very self evaluation of the life role he played: "I was crazy and low-key, got the hall, went down to the kitchen, the hall was very calm, the kitchen was very warm, there was no pain in role conversion," this is true. This trait has been fully revealed in his teaching career.

In the early 80s of last century, when Yan Jiehe taught and educated people in Jiangsu, he launched his family to weave straw hats, bamboo hats and dustpans. But later he was approved to follow the capitalist line. His factory had been sealed up, and the raw materials produced could only be destroyed in the warehouse. Therefore, the loss was huge, but it owed 80 thousand yuan. After that, the policy improved and began to encourage hard work to get rich. Then he regained his old business and returned all his debts in a year.

In 1986, Yan Jiehe lost his job as a teacher because of his second child's birth and violated the family planning policy. He was forced to be laid off as a deputy director of a state-owned enterprise. He called this forced entrepreneurship "jumping the sea" and "going to sea": the latter means that if not, it can still come back.

The following year, a depressed enterprise in Huaian bid open to the public for tenancy. Its bidding scheme was awarded the highest score, and became the director of the competition through open competition and public recommendation. As a Chinese teacher, he wrote many high quality bidding schemes, which had puzzled a lot of people. But he made a profit in the first quarter after he took office, and then served as the legal representative of three companies, including cement products factory, building materials company and trading company.

Because of the bitter taste of policy, Yan Jiehe has always attached great importance to "policy". He thinks his success is the result of his own understanding of China's political and economic laws.

His family planning policy in 80s has thrown him away, but Deng Xiaoping's policy of "encouraging some people to get rich first" has also benefited him. Many years later, when he attended numerous speeches, he reminded China's private entrepreneurs: "we must understand politics. Entrepreneurs who do not know politics can not be first class entrepreneurs. {page_break}

Three, the first barrel of gold is exchanged for losses.

Yan Jiehe's first barrel of gold is also inseparable from the background of the gradual liberalization of the policy. In 1992, Deng Xiaoping's southern tour further affirmed that "business to become rich" and "let some people get rich first". The policy environment is becoming more and more relaxed.

Around 1992, Yan Jiehe was familiar with the cement products industry and began to pay attention to the construction industry. He believes that compared with other industries, building construction can be free from geographical restrictions and "can go all over the world", which can satisfy his ambition to go to Shenzhen and Beijing to do big business. In the initial stage, he rented an enterprise that was on the verge of collapse and registered the construction of Huaian Jiangjiang construction company, which was the predecessor of the Pacific Construction Group. This venture was described as "going to sea" by him.
In 1996, Yan Jiehe, 36, was able to dig out the first pot of gold after 4 years in the sea.

At that time, Yan Jiehe had run from Huaian to Nanjing eleven times to find a project, and finally picked up a "chicken ribs" project, the Nanjing round road project. When he took over the project, he had been subcontracted for fifth times and knew that he needed to lose at least 50 thousand yuan, but he still insisted on taking it.

He recalled to us: "at that time, the target was 290 thousand and 4 or three small culverts. An order from a small owner of a hotel is already fifth packs, and the management fee has exceeded thirty or forty points. At that time, a sum of 50 thousand yuan was made to compensate the three culverts well. Later, I wanted to pay for it and put him in the right place. Since I can't earn money, I have to earn a face. Since I lost the money, I would pay for it.

As a result, the project lost 80 thousand yuan, because many lost 30 thousand yuan, touched many people. The effect was: later the mayor invited him to dinner, and then gave him the project package. With the completion of the Beltway, he made nearly about forty million of his work and earned 8 million 600 thousand.

"Compensate for 50 thousand instead of 80 thousand, and the result is 8 million 600 thousand. First class businessmen want to ask for money first, then we are not first-class businessmen.

Four, the rise and fall of the "Pacific Construction Empire".

Yan Jiehe, who became a "first class businessman in China", climbed to the top of his career in the more than 10 years after the first pot of gold.

Honors followed: in December 1998, it was awarded the "glorious star" title by the State Administration for Industry and Commerce and the Chinese Association of individual workers; in May 2001, it was awarded the honorary title of "Jiangsu model worker"; in March 2004, it was awarded the "socialist construction contribution Medal"; the media commended the title "China's largest contractor" and "black horse rich". However, all this ended abruptly after the 2006 debt crisis.

Before and after 1995, Yan Jiehe was incorporated as chairman of Jiangsu Pacific Engineering Co., Ltd., and the company changed to Jiangsu Pacific Engineering Group Co., Ltd. in June of next year. He was appointed chairman and President of the board of directors. In December 2002, the group name was changed again to China Pacific Construction Group Co., Ltd., and Yan Jiehe was chairman and President of the board. With the change of name, Yan Jiehe's "Pacific Construction Empire" has also expanded rapidly.

Yan Jiehe's "Pacific Construction Empire" is built on two controversial models, one is to cooperate with local governments, and the other is to adopt BT mode to get projects. The so-called BT is the abbreviation of English Build (construction) and Transfer (transfer), which means "construction - transfer". It is a financing mode for the government to use non-governmental funds to carry out basic non operational facilities construction projects.

Second, it is the acquisition of state owned enterprises by "zero assets". For the acquisition of zero assets, Yan Jiehe gave his explanation to the media: "our way is to package the enterprises with positive assets and negative assets, so that the whole acquisition package will become a negative asset, so we can proceed with the" zero assets "merger.

In the early days, Yan Jiehe began to explore small and medium-sized cities in Northern Jiangsu and central Jiangsu in the early 1996. For the first time, the BT mode was used to operate infrastructure projects in Suqian, Northern Jiangsu Province. In those days, the Suqian municipal government wanted to build a north-south City Avenue, but it was difficult for the finance to be appropriated, so the 50 million yuan was launched by the Pacific. After the Suqian project, Yan Jiehe gradually discovered the great business opportunities contained in this model. Besides the large number of BT mode operation infrastructure projects, he began to purchase state-owned enterprises on a large scale in the form of positive and negative assets packaging. {page_break}

Especially in November 2003, when Yan Jiehe acquired the 28.18% stake in "ST", he began to get acquainted with the local government departments. He used the two modes to complement each other. For example, in the reorganization of ST, he lost 500 million to 1 billion yuan in the Pacific losses, but then he took the construction list of the site about 5000000000.

In the latter mode, he only focuses on deficit companies in the acquisition of state-owned enterprises. The state-owned enterprises are closer to the government by accepting losses. In order to rapidly expand the total assets of the Pacific Group, the Pacific has formulated a state-owned enterprise that plans to purchase more than fifty billion yuan of assets in 2005. His packaged M & A has also solved the plight of many state-owned enterprises. Because of many difficulties, state-owned enterprises have become the heavy burden of local governments. The Pacific Group's packaged acquisitions have catered to the welcome of many local governments at that time. He firmly believes that this is a business model that is suitable for China's national conditions and has positive significance. "Acquisition of state-owned enterprises for local governments to carry out the burden of difficult state-owned enterprises, and solve unemployment, laid-off and other social problems, which makes the local government have a good impression of the Pacific construction, so that some good municipal projects will be outsourced to the Pacific construction priority."

According to media reports before and after 2006, the Pacific BT model was quickly copied to other underdeveloped areas of the country, and nearly 270 billion yuan of orders were accepted. According to Yan Jiehe's plan at that time, the list of Pacific infrastructure should exceed 500 billion yuan in two years.

In the same period, the media also described the scale of Yan Jiehe's M & A in the state-owned enterprises: the Pacific Group had acquired thirty-one state-owned enterprises and integrated six billion yuan of state-owned non-performing assets. This is not enough to make a comment. Even more surprising, Yan Jiehe himself told a media exchange in Beijing at the end of 2006, and revealed that the SASAC was planning to establish a joint venture with him to jointly integrate state assets.

Because of such a large scale and the ability to use such huge funds, Yan Jiehe's public image is becoming more and more significant. In the Hurun China rich list of 2004, Yan Jiehe's personal assets amounted to 1 billion 500 million yuan, which surged to 12 billion 500 million yuan in 2005 and jumped second in the list of rich people.

But in its rapid expansion of the "Pacific Construction Empire", Yan Jiehe's business model - "from the government taking orders, reusing the credibility of the government to apply for loans to banks, using bank short-term loans to start projects, and then occupying downstream suppliers or engineering team funds, eventually get the government's long-term repayment" - the risk is becoming more and more prominent.

On the one hand, Yan Jiehe frequently took orders from the local government and was surpassed by the Pacific Construction Group and the local government. He frequently argued that "in fact, the Pacific and the government have always been trading under the sun. To deal with the government, you must get through it and know what can be done and what can not be done. We have entered the deep courtyard of the government from the confusion of that year. The Pacific does not deny that government officials have taken bribes to us, but the Pacific does not want to take political risks. Such projects are reluctant to do so. With the leadership of so many transportation systems throughout the country, we haven't been searched by the Discipline Inspection Commission for a second.

Despite his repeated emphasis, "there is no" original sin "in the Pacific, and my first barrel of gold is very clean. He also estimated that such an industry with Chinese characteristics would benefit the Pacific Group for at least twenty years. However, this situation has only caught ten years of glory and is in a predicament.

The real cause of the Pacific crisis is not from the crisis of relations with local governments, but from its own capital chain crisis. At that time, some people pointed out Yan Jiehe's business model: "for financing cost considerations, most overseas BT projects have venture capital backing, and generally do not adopt short-term bank loans. Yan Jiehe did not have venture capital backing up, but wanted to use the bank. At the very beginning, he hid a lot of risks and had the possibility of collapse at any time. " In particular, the Pacific Construction Group later acquired local government projects mainly by acquiring state owned enterprises, which increased the risk of this mode. {page_break}

Five, 2006 of the worst.
In 2006, Yan Jie was an ugly year.

This year, the construction of the Pacific was entangled. Most of the plaintiffs in these suits were commercial banks in various places, and defendants were all Pacific Construction Group or affiliated enterprises, including Yan Jiehe, the actual controller of the group. This year, he was collated by 9 banks and became a defendant frequently. His wealth quickly shrinks. At the same time, the ST vertical and horizontal reorganization plan, which had lasted more than two years, failed.

In September, he was forced to return to Nanjing to deal with agencies and individuals seeking money. In October, the court launched a deterrent mechanism to limit its high consumption. According to media reports at that time, "Nanjing Housing Authority's registration data show that as of September 21, 2006, in just half a year or so, the Suzhou intermediate people's court, Nantong intermediate people's court, and Nanjing intermediate people's court have sequestrate five residential houses of Yan Jiehe for the twelve time, most of which have been repeatedly frozen for more than three times."

To limit its high consumption, the description of the media is due to the fact that in the 4 cases of economic decisions that have been taken into effect in the Pacific Construction Group and Yan Jiehe, there are still more than 32 million 380 thousand yuan in arrears. The court has launched a deterrent mechanism and made a number of mandatory measures to limit Yan Jiehe's exit. There are also media reports that "in 2006, Yan Jiehe owed 400 million of his debts, and he himself appeared in court as a defendant."

Yan explained afterwards to us: "outside, I was restricted travel because of debt, on the contrary, I went out several times in 2006. I was accused by the outside world. Actually, I was the defendant because of the joint and several liability as a guarantor, not the first defendant. "

In May 20th of that year, he publicly announced that he resigned as chairman of the board of Pacific Construction Group because of physical and mental exhaustion. Huang Xinzhong, President of the former Pacific Construction Group, served as chairman of the board. He decided to formally withdraw from the Pacific Construction Group at the end of 2007. Since then, Yan has repeatedly said that it will dilute its stake, and ultimately hope to remain at around 10%.

In the same period, Yan Jiehe also set up a number of companies such as Su Shang and Beijing merchants, which developed around the Pacific mode, but the follow-up movement was not great. These behaviors are analyzed by public opinion: "Yan Jiehe's intention is to have no longer wanted the Pacific Ocean, and 90% of his shares have been transferred out. There is no excess shell in the Pacific construction."

Since then, Yan Jiehe has gradually faded from public view. In a media interview at the end of 2006, when answering the question of how much debt owed to the Pacific construction, he said that the total liabilities of the National Bank were 382 million yuan. "For a company with an annual output value of about 30000000000, 382 million is too small, even if 10 billion is normal." In another media interview, he also said that all his personal debts were paid off.

After the "debt gate" crisis, Yan Jiehe transferred the Pacific shares to his wife and remained silent for a long time. He believes that his experience in 2006 can be described as "the biggest storm since the founding of Chinese entrepreneurs".

After many years, he concluded, "why am I still so crazy"? It's a good foundation. Everyone says that trees attract the wind. I say trees are not big. The key is deep, and the root is the foundation. The foundation of a person's genes and work experience is the foundation. {page_break}

Six, re emerge from rivers and lakes

As early as the beginning of 2006, Yan Jiehe had set a good place for himself in the future. After that, he concluded that the storm of 2006 was just an episode of his fading out of the Pacific.

At the end of 2005, when he received an exclusive interview with a television station, he talked about the future school plan in a high voice: after 2008, he wanted to join some universities in China to join the Pacific Business School. The idea is that he observed a large number of returnees returning to China every year, but these students are not familiar with the Chinese market. He hopes to cultivate local business talents.

"My scenes are different. I have always taught and educated people. I never thought that I became a businessman and a businessman for 20 years. When I went back to do education, I finally went out of the way and went back to normal." with such a plot, Yan Jiehe came out again after the storm.
In December 14, 2007, a military yard in Xishan, Beijing. Yan Jiehe invited the media to participate in the founding ceremony of "Xiangshan Hua Tuo's arrow". He announced two major events: first, to step down from the position of chairman of the Pacific construction board, to build a new Huayang construction company and to be chairman of the board of directors; two, to set up "Xiangshan Hua Tuo's arrow", and to treat all kinds of diseases for SMEs in the capacity of senior consulting institutions.

The author was also lucky to be invited. The winter in the west of Beijing is extremely cold, but this does not stop the generous and passionate expression of the house. He was holding a microphone and describing how he would diagnose China's small and medium-sized enterprises with the rapid speed and frequent quotations in Mandarin. No media had the chance to ask him about whether the storm was completely over a year ago.

In a recent interview with us, he described his plan for business schools. "We do not aim at making profits, such as student standards, not that business schools need to have a threshold of 250 thousand or 200 thousand. The money that comes out is often not the ideal student, but the ideal student often can not afford to pay, this is our sorrow. In his business school, "no money, I still pay my salary here to study." Teachers including teachers in this school are also not able to come to this school as a teacher without managers of more than five years.

He threatened to make his business school the top 5 in the world in 15 years, and said that the relevant plan is "landing".

Over the past few years, Yan Jiehe has used "two words" to describe his career: "it should be said that three years after the establishment of Hua Tuo's arrow, we have developed from two or three employees to 3000 employees. From the monthly output value of hundreds of thousands to today's monthly output value of several hundred million. Hundreds of thousands to several hundred million, what is the concept of this span? Not to mention the benefits to enterprises. The social effects of China are quite magnificent. Our early Hua Tuo's arrows were all young business people in 80s 70s, and now they are the successful ones in 50s 40s. My experience is to engage in activities. The average age of the people who recruited me is increasing. This is the height of Hua Tuo (arrow) is getting higher and higher. He has already recognized himself as a successful person on the top.

As for himself, he feels that there should be a relatively high happiness index. Oneself should be in the advanced stage of life. All want to open, all want to understand. Xiao Cheng relies on friends, Dacheng depends on enemies, gentlemen grow us, villains make us mature, "he said.