The Princeling of Nanjing

by Ian Hamilton

  “Mega Metals.”

  “What about it?”

  “It’s a business created out of corruption and run in a corrupt manner.”

  He looked towards the doorway, then back at Ava.

  “Who are you?” he asked as he slid back into the chair. “What do you want? Is this some feeble attempt at blackmail?”

  “A week from now, I doubt that Mega Metals will still exist,” Ava said. “Dennis Calhoun will be disgraced, and instead of bragging about his business acumen he’s going to be fighting to stay out of jail. The Tsai family will be looking over its shoulder, wondering what the powers in Beijing will do to them. It’s going to be complete chaos.”

  Yin shook his head. Ava noticed he was having trouble looking her in the eye.

  “The main question you have to ask yourself is whether you want to go down with them.”

  “How can you possibly make those kinds of assertions?” he said.

  “I have the facts to support them. It’s going to go under, you can count on that. Calhoun and Tsai have only one chance to avoid getting swamped themselves,” Ava said, and then leaned towards Yin. “And that’s if they pin the blame entirely on you.”

  “I’m an employee.”

  “You’re managing the business. If Tsai and Calhoun say they knew nothing about the deals and it was all your doing, then who are the authorities in the U.K. and China going to believe?”

  “They wouldn’t do that.”

  “Don’t be so naive,” Ava said. “They would do it in a heartbeat and without a second thought. They’d throw you to the wolves, and the Chinese wolves have shown a tendency to kill whoever they sink their teeth into.”

  “I’m a British citizen.”

  “You were born in China and you live and work in China. The Chinese government won’t care what passport you carry or what citizenship you claim. They’ll come and get you, and once they have you, they won’t let you go until you’re on your knees and they’re putting a bullet in the back of your head.”

  Yin shook his head. Ava could see panic and confusion on his face.

  “You know Mr. Calhoun quite well, I imagine, and you’ve seen how the Tsai family operates. You know the kind of power they have,” Ava said. “Neither Calhoun nor the Tsais are what you would call warm and considerate. Can you imagine them not doing whatever is necessary to protect themselves and their reputations?”

  “Still . . .”

  “Look, you have a chance to get out of this situation intact, but you need to realize that I’m your only lifeline.”

  “In what way?”

  “I’ll come to that,” Ava said. “But before I do, let’s you and I just talk. I want to verify and expand on some facts. And, if you don’t mind, I’d like to start at the beginning.”

  “I’m not sure I have any interest in doing that.”

  “Then you can try to run past the big man outside, but I have to warn you that he’s surprisingly fast.”

  “And if I agree?”

  “When we’re finished and if you want to leave, I promise you that we won’t prevent it. And when we’re finished, if you decide you want our help, you’ll have it.”

  He took a deep breath. “Are you with the government?”

  “No, but we’ve opened up lines of communication with more than one government and they have an interest in our efforts. It’s safe to assume they will become directly involved sooner rather than later, and charges will be brought against Mr. Calhoun in the U.K. God knows what the Chinese government will choose to do with the Tsai family, and with you — if you’re still here.”

  “Then who are you with?”

  “Does that matter?”

  “Someone trying to settle a score with Mr. Calhoun?”

  “You could say that.”

  “Then why do I have to get dragged into it?”

  “Vincent, you’re running a company that was founded on the basis of a corrupt agreement, an agreement you were a party to. The agreement is going to be exposed and all hell is going to break loose. Now, I repeat, do you want to co-operate with me and get out of here in once piece with your wealth intact, or do you want to end up in a British jail, a Chinese jail, or a Chinese grave?”

  “How do you expect me to respond to a question like that?”

  “Does that mean you’re going to co-operate?”

  Yin hesitated and looked towards the door, then back at Ava. “I’ll tell you what I can,” he said. “But I may not know as much as you think I do.”

  “I can accept that, and I’m not going to be unreasonable. So, let’s start with an easy question: do you run a company called Mega Metals?”

  “You know I do.”

  “What’s your title?”

  “Managing director.”

  “Are you also the legal representative?”

  “Yes.”

  “Is your boss Dennis Calhoun?”

  “My immediate boss is Rory Taggert, the CEO in the U.K. Mr. Calhoun is the company chairman.”

  “And you have a partner named Lau Ai?”

  He hesitated.

  “Let me rephrase that,” Ava said. “The majority owner of your business is a company called Shell Investments. Shell is owned by the Tsai family, and they’re using Lau Ai as the person of record.”

  “You could put it that way.” He licked his lips. There was white residue in the corners of his mouth.

  “There’s water on the table if you want some,” she said.

  He reached for a glass and filled it.

  “How did you know about Lau’s role?” Yin asked.

  “I’m asking, not answering questions. So just answer, please, and please be direct,” Ava said. “Now, when was Mega Metals established?”

  He hesitated, his eyes flitting around the room. Ava knew he was looking for a way out.

  “Vincent, you’re making this much more difficult than it needs to be.”

  “Close to five years ago,” Yin said.

  “Have you been with the company since the outset?”

  “Yes,” he said.

  “Where were you before that?”

  “Calhoun Metals.”

  “In the U.K?”

  “Yes, I worked in the Newcastle office. I joined them right out of Northumbria University.”

  “Doing what?”

  “Sales and marketing.”

  “You obviously did well.”

  “I did okay.”

  “Did you work for Dennis Calhoun?”

  “Not at first, but it was his business, and it wasn’t so big then that he didn’t know who most of us were.”

  “Your importance must have increased when he decided to expand into Asia.”

  He nodded. “There wasn’t anyone else in the office who spoke Mandarin.”

  “Were you born in China?”

  “Beijing. My parents emigrated when I was eight.”

  “So you didn’t know anyone in Nanjing?”

  “No one.”

  “Then how did Mr. Calhoun hook up with the Tsai family?”

  “He had a friend in Manchester who was doing business with them. He recommended that Mr. Calhoun contact them to see if he could work out his own arrangement. At the time, Mr. Calhoun was quite discouraged about our prospects in Asia. He’d set up businesses in Singapore and Kuala Lumpur, but neither of them did very well. This friend told him that the Tsais made doing business very easy.”

  “This friend was a Westerner?”

  “Yes.”

  “What kind of deal did he have?”

  “He had a factory that was making cheap housewares. He said he paid a monthly fee to make sure he had no problems getting raw materials, managing his labour force, or shipping goods out of the province.”

  “How do you k
now that?”

  “Mr. Calhoun told me.”

  “When?”

  “Later, after we had started our discussions with Tsai Men.”

  “What was the name of the friend’s company?”

  “I think it was called Phillips Trading.”

  Ava flipped back to the front of her notebook and her first list of people paying the Tsais. Phillips Trading was contributing $5,000 a month.

  “How did Calhoun Metals initially contact the Tsais?”

  “Mr. Calhoun’s friend told Tsai Men about our company and then arranged a conference call.”

  “Did you take part in it?”

  “I took part in all of them, and in all of the meetings that followed.”

  “Obviously Mr. Calhoun speaks no Mandarin.”

  “And I don’t think that Tsai Men speaks English, or at least I never heard him speak it.”

  “So you interpreted?”

  “For Mr. Calhoun. Tsai Men had his own person.”

  “What was his name?”

  “Wang.”

  “Not Ling?”

  “Ling was only there for the first few meetings and then he was replaced.”

  “Why?”

  “I don’t know.”

  “How many meetings were there in total?”

  “A lot. They went on for several months. I think we made four trips to Nanjing.”

  “It sounds like things were complicated.”

  “The basic structure of the deal was in place very quickly, but sorting out the numbers was the hard part.”

  “By ‘basic structure’ you mean that it would be a fifty-one, forty-nine split in the Tsai family’s favour? Calhoun Metals would front all the cash and inventory, and the Tsai family would make sure that business came to the new company?”

  “How do you know that?”

  “Never mind. Is what I described accurate?”

  Yin squirmed in his chair.

  “Vincent, I asked you a question and I want an answer.”

  “Yes.”

  “So what was making people uncomfortable about the deal?”

  “It wasn’t so much people as it was Mr. Calhoun.”

  “What was bothering him?”

  “Tsai Men wanted Mr. Calhoun to commit to a far larger inventory than he thought prudent, and Mr. Calhoun was looking for guarantees that the business would operate the way Tsai Men promised. Truthfully, there was quite a bit of mistrust from our side at the beginning.”

  “What was Calhoun’s reluctance about the inventory?”

  “He was being asked to put two hundred million dollars in cash and goods into a company that we owned only forty-nine percent of. He was afraid that two months down the road the majority owner would scrap the business and scoop the inventory.”

  “That’s a legitimate concern. What prompted him to take the plunge?”

  “He met the Governor.”

  Ava fought back a smile. “And were you there at the meeting?”

  “Yes.”

  “Who else?”

  “Tsai Men and his wife.”

  “What did they discuss?”

  “The business.”

  “Specifically.”

  “Well, Men outlined the deal to the Governor and then explained that Mr. Calhoun was looking for assurances that the inventory would be turned over quickly and that the profit margins would be healthy.”

  “How did Tsai Lian respond?”

  “He asked Mr. Calhoun if he was financially stable enough to provide a five-hundred-million-dollar inventory if it was required.”

  “And Calhoun said?”

  “He could provide an inventory of any size as long as it was turning and the margins were there.”

  “And the Governor was satisfied with that?”

  “He seemed to be, because he immediately told Mr. Calhoun that he would never have to worry about the inventory turning.”

  Ava looked down at her notebook and took some small breaths. “Did he give any reasons why Mr. Calhoun should believe him?”

  “He said that any company that didn’t commit to buying from Mega Metals wouldn’t get a dollar of government business and would find it difficult to get a building permit for any private project. He emphasized how much construction the government undertook. He finished by saying that any company that reneged on a commitment to Mega Metals would get their permit revoked.”

  “Are those the words that came directly out of Tsai Lian’s mouth?”

  “As best as I can remember.”

  “This is important, Vincent, so think back. Was it the Governor himself who told Mr. Calhoun he would ensure that anyone who didn’t buy from Mega Metals would have a difficult time getting building permits?”

  “It was.”

  “Did you put those guarantees on paper? Did you write them into the agreement?”

  “Of course not. It was a handshake deal as far as those details were concerned. What was funny was that the Governor commented on that. He said to Mr. Calhoun that this was the way Chinese preferred to do business — friend to friend.”

  “Guanxi?”

  “Exactly.”

  “How about protecting the profit margins? Did the Governor comment on that?”

  “All he said was that it was up to us to make sure the company was profitable, but given that the customers had to buy from us, he couldn’t foresee that ever being a problem.”

  “That made your sales and marketing job kind of easy, didn’t it.”

  He smiled tentatively. “There was never any problem with turning inventory or making a profit, if that’s what you mean. My job is mainly inventory control and margin management.”

  “So the company has operated along the lines that Tsai Lian established from the start?”

  “Yes.”

  “And you’ve been running it since day one?”

  “It was Mr. Calhoun’s idea that I do it. He wanted someone who knew our end of the business and someone he felt he could trust. It was a huge advantage that I could speak both languages.”

  “What does Lau Ai do?”

  “She comes to the office every quarter with an accountant — actually that Ling you mentioned — to check the books. That’s about it.”

  “Vincent, talk to me a bit about the money side of the business.”

  “What exactly do you want to know?”

  “What are your sales?”

  “The company has grown every year since we started, and this year we were on schedule to do close to four billion dollars.”

  “That’s huge. What about your profit margins?”

  “Twenty percent, on average.”

  “And what do you net?”

  “Ten percent.”

  “So about four hundred million dollars in profit this year, split almost evenly between the partners.”

  “Yeah, that’s about right.”

  “If you didn’t have the deal with the Tsais, where would those numbers be?”

  “Mr. Calhoun was operating at around seven to ten percent gross profit margin in Singapore and Malaysia and was lucky when he broke even. I imagine it would have been much the same here without the arrangement with the Tsais.”

  “So basically the Governor is now putting four hundred million a year into your company coffers.”

  “I wouldn’t put it that way,” Yin said.

  Ava shrugged. “Where does the profit go? Do you put some of it back into inventory? Have you invested in other businesses?”

  “Obviously we’ve had to keep expanding our inventory, and there’s an allocation for that. Some money goes back to the U.K. parent company and the balance goes into an account in Cyprus.”

  “Whose account?”

  “I don’t know. It’s ju
st a number.”

  “Is it logical to think it’s Mr. Calhoun’s?”

  “I guess.”

  “How about the Tsai family profits?”

  “Lau Ai looks after those.”

  “What do you mean?”

  “She issues her own instructions to our bank. It’s her business. I don’t interfere.”

  Ava pushed her chair back from the table. Yin recoiled and she saw he was startled.

  “I have to make a trip to the ladies’ room,” she said. “When I get back, I’m going to ask you many of the same questions again, just to make sure you haven’t forgotten anything. But I have to tell you that so far I think it’s gone very well.”

  “Can I leave when we’re done?”

  “Not quite so fast. I’ll explain that part later,” Ava said. “Oh, and give me your cellphone. I’ll hold on to it until I come back.”

  ( 37 )

  Suen was sitting in a chair just outside the boardroom. He looked tired and bored.

  “It’s going very well,” Ava said. “I need to make some phone calls, and I’d appreciate it if you could contact your videographer and tell him to come here.”

  “Yin stays in the room alone?”

  “Yes. I have his phone, so there isn’t much he can do. Check in on him once in a while just to keep him on edge. I’ll be back soon. And look, I know you had a long night. If you want to get a replacement, I don’t mind.”

  “I’ll manage,” he said.

  The building’s lobby was empty and the front desk was still unoccupied. Ava sat down and took out her phone. She checked the time and saw it was just past seven a.m. in the U.K. She hoped that Michael Dillman was an early riser.

  “Dillman,” he said after two rings, his voice sharp and clear.

  “This is Ava Lee.”

  “Ms. Lee, it is early.”

  “Well, I have what you want and I was eager to tell you.”

  “I beg your pardon?”

  “You told me last night that you didn’t have anything that directly connected Dennis Calhoun to Governor Tsai, and that you didn’t have anything that detailed how Mega Metals actually operates. Well, I’ve found both of those things.”

  “How is that possible? When we spoke last night, my understanding was that you were dead-ended. What could you possibly have found so quickly?”